On Laundering Black Money - And Gold?

Bruce Krasting's picture


Switzerland started off the money laundering year with a bang. Three big cases in just a month:


- The Swiss accounts of Sergei Magnitsky have been frozen as a result of an ongoing corruption case in Moscow. This case is interesting as Magnisky died in 2009 (He died in prison - supposedly of natural causes - but he was only 37...)

The Russian's have made this claim:


Prosecutors accuse Magnitsky and his former client, London-based investor William Browder, of a $230 million tax fraud carried out through subsidiaries of Browder’s company, Hermitage Capital Management.


I have no idea what this case is really about (it looks political) but whatever it is, it stinks to high heaven.



-The accounts of Malaysia's Taib clan were frozen after a criminal complaint was filed in Kuala Lumpur. The filing read:


"Taib abused his public office in a spectacular way.”


Of interest (to me) is that the revelations about the Swiss accounts came as the result of a divorce proceeding - an angry ex-wife blew the whistle. The talk is that this mess may top $20B! (link)



- The most embarrassing revelation for the month was the release of information that Luis Barcenas, a Spanish politician implicated in a corruption scandal, had 22m Euros ($30m) stashed in a private Swiss account.



I'm sure that there were many other examples of busted money launderers in Switzerland for the month. They just didn't make the papers. In 2011, 1,500 separate cases were pursued by Swiss authorities. That "bumper year" was due to the Arab Spring, and all the hot money from N. Africa that got exposed. Things have probably slowed down in 2013 - So now what is it down to? 50 a month??


This business of black accounts, crooked money and crooked bankers fascinates me. How big a problem is this? I don't think anyone really knows the answer to that. The fact is, it's huge, and it's growing. The following data is from 2010. Even if it is only partially correct, the implications are staggering:


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What? $700B in one year! From only 10 countries! China is how big in this dirt pile?


$700B is a very big number, it is larger than the GDP of Saudi Arabia (or Switzerland), it is equal to the GDP of Indonesia (Pop =240,000,000), it is twice the size of the GDP of Michigan. And this is only from a small group of countries. The industrial countries must be adding huge bucks to the dirty-money list.


I got some input on this topic that might be of interest to gold bugs. I'm not certain of this info, so be guided accordingly. The email reads (in part):


There is a trend developing in the last two years where those with flight capital are trying to launder gold. For example gold is being smuggled out of Venezuela sent to Curacao where the exporter will create documents that he bought it from a country like Peru. It then goes on to a refinery in Switzerland or Dubai and those proceeds or sometimes the refined product are then deposited for the client.

Another example is Dominican Republic which has an usually large outbound flow of mined gold. The reason is similar, raw gold from Venezuela as well as from Africa comes to DR gets washed through a legitimate mining operation and then sent on to a refinery.


Again, I can't confirm any of that, but on the broader question of whether gold is now playing an increasing role in money laundering, I'm certain that it is.


Another comparison on the magnitude of global money laundering is that $700B is 3Xs the value of all of the gold in Ft Knox (valued at 1650).


On one hand you might conclude that the effort to snuff out dirty money in banks is going to be a constant source of new demand for gold. And you would be right in that conclusion. But on the other hand, if gold is going to be where hot money goes, how far away can it be where private ownership is restricted?


There is another side to this. Assume that there is already a large ownership of physical gold by the dirty money crowd (There is). Assume further that this ownership trend is increasing as global banks get squeezed by money laundering investigations and fines (think HSBC). Do the "deciders" in the globe want to enrich those that are now parking hot money in gold? "No" is the answer. This set-up is another reason why suppressing the price of gold would be "helpful". It certainly argues against gold backed money. That would make the bad guys rich.


Black Money

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the grateful unemployed's picture

this is a great article, money laundering is a global problem which threatens the economy. gold is a natural fit, it can melted and reissued with new reg numbers.

but to clear up some things, you need to mention the basics; money laundering is used to cover up some illegal activity, usually weapons, and drugs. china may supply a lot of illegal money to the global money laundering system, which by definition might be legal in another country. additonally money laundering is a government problem. what you call it when bernanke monetizes the debt (and what do you call the people who benefit either directly or indirectly) generally money laundering comes with a cost, you can launder money in a vegas casino for instance. (the biggest US money laundering criminal syndicate ever involved jack abramoff and tom delay. most of that money went into campaign coffers, and was funnelled to offshore banks in the caribeean, often through venture capital arrangements. venture capital is an exploitable loophole for money laundering, one which brought down congressman duke cunningham.

simple corruption such as obama giving money to solyendra, then receiving a campaign kickback, is racketeering, and is only slightly different than money laundering but any form of kickback scheme is basically money laundering.  at the top of the ponzi pyramid there is the purest form of money laundering (a friend called me once and asked me if i wanted to invest in a gifting club - lets say for instance i made a grand selling weed, i contribute that to the gifting club, when new money comes in i get paid, and declare that  money as a gift if i want.)

the idea that there is clean money dirty money blood money is all ancient history. governments are the only ones allowed to launder money, (or print money if you wish). its counterfeiting plain and simple, and gold is a problem because its malleable. i found this gold in my backyard! right

Boxed Merlot's picture

i found this gold in my backyard! right...


Gold certainly serves as the true "legal tender" without having to have the description printed on it.  Having been raised here in NoCal and being exposed to the CA gold rush history, lore and current events I supposed owners of gold mines would be under reporting their finds but this report makes a great case for over-reporting the stuff.  When profits can be made in market motion, up or down, it certainly makes sense that the other side of the lie with a hole in the ground is one can claim the stuff came right out of the hole. 

Too funny.

This is gonna make miners increase in value, dontcha think?  Gives a whole new meaning to chinese laundries.

the grateful unemployed's picture

you being from NoCa i'm sure you know some people who grow a bit of the herb, so you sell the crop and take payment in gold and then claim you found it on your claim. let the irs figure that one out.

FeralSerf's picture

". . . money laundering is a global problem which threatens the economy."

It doesn't treaten the economy.  It threatens the Elites.  Their club is an "Elite" Club.  They don't need or want any uninvited guests or new members like the late Ferdinand Marcos or some South American drug kingpin for example.  They prefer the company of their current drug kingpins, like the the Windsors.

BlackVoid's picture

No, because the Elite launder way more money than anybody else.

SAT 800's picture

You're right, and he's wrong. The threat to the economy is the fools trying to manage it according to their very limited understanding. And, for Bruce; I'm sorry to tell you this, Bruce, but frequently the "Bad Guys" do get rich. It's nothing new.

the grateful unemployed's picture

its actually true that some large money laundering businesses are exposed from time to time. but mostly the laws apply to you. you have to live by them in your daily life. my point is that the biggest money laundering cartel is the UST/Federal Reserve. money is illegally printed, washed and made sanitary for the banks. (so they can lend it to you)

SAT 800's picture

Of course. meditating on "money laundering" is a waste of time, at best.  The big washing machine is in Washington.

falak pema's picture

30 trillion $ and growing in off shore locations...

It is the hub of oligarchy world; so it won't implode until the Oligarchy does.

And that is not on the cards currently; whatever the doomers may say.

We are heading the other way : more narrow centralised control world wide; where black money is no big deal as its raised on black gold, the mega profit pump!

Just look at Exxon or Apple, they don't pay much taxes and their return on political investment to achieve this (via lobbying) is awesome. Google is not far behind, its gonna take over the Internet publicity racket worldwide; do what it takes...; thus run all media power via its search engine monopoly. Smart big data model has Google! 

Black hearted is the colour of our neoliberal man's  new, elitist, oligarchy age!

Black like opaque markets doped on HFT and mega shadow banked derivatives.

Until it goes multicoloured in alternative energy and alternative oligarchies...When thieves fall out.

But that isn't in the cards based on all the WS/CB hubris, unless the shit under the carpet has got so ominous it has become a raging ponzi python!

Then the bank dykes will burst wide open! 

swmnguy's picture

Falak:  You may have meant "Then the bank DIKES will burst wide open!"  The word you used has a different connotative meaning to a US-born English speaker.

Actually, I like your version better for the mental imagery.

falak pema's picture

lol, ty, so do I !

Not that I am anti gay! 

"Dick" van dyke and Mary Poppins,  or as in my favorite sorceress : "bewitched"...It's nice to play on words even when its not done purposely! 

Dick Van Dyke : L'acteur de Mary Poppins, 86, marié à une femme de 40 ans  Hows that for being bright eyed and bushy tailed!

Ma sorcière bien aimée (TV Series 1964–1972) - IMDb

Remember her?

Orly's picture

I practiced hours doing my nose like that.  Never really worked.

I can still do the Mr. Spock thing with my hand, though.


falak pema's picture

yes some people have unique charms.

Kayman's picture

If the U.S. government, or all Western governments for that matter, really wanted to root out the black money hoarded away in secret bank accounts, it could be done.

But even when UBS divulged (some) American accounts, not one, I repeat not one American politician was outed. Amazing to this observer. 

BandGap's picture

Another side to consider....if I stole a lot of money and had to leave Dodge, what would I do?

This is all about rats leaving a sinking ship. There is a lot of thought being given to getting your hoard stashed before the whole shitpile explodes.  If this all goes up in flames does this mean these people will be off the hook?

seataka's picture

Saw a great cartoon, two old guys fishing, there's a mushroom cloud on the horizon, as they gaze at the sight, one says: "Fred, now there's no limit"

Sun_Tzu's picture

I'll tell you what this means, Norm -- no size restrictions and screw the limit!



pipes's picture

AS IF TPTB give a shit whether these supposed "criminals" (HIGHLY relative term, given the subject matter) are able to increase their "wealth" (another relative term).


This is useless blathering.

Bansters-in-my- feces's picture


Why would you wright such a stupid fucking article.???

Bruce Krasting's picture

I'm just curious, could you elaborate on what you found so stupid?


The Wrighter Writer

SAT 800's picture

You arrive at the conclusion that some marginally larger effort will be made to prevent the rise of the price of gold; in order to avoid profits for the "bad guys". This is not only stupid; it is the kind of thinking I would expect from someone who reads comic books for recreational literature. Most "money laundering" is a definitional crime; it's criminal because it evaded the currency, capital, export controls of the originating country; or it evaded taxes; a crime to avoid another crime. It's completely obvious that the enormous overwhelming motivation for any attempt to control the price of gold, which cannot be done and will not be done, will be the simple and obvious one of maintaining the apparent value of the paper currency; this has always been the case. During the French Revolution they cut your head off for entering into a contract involving the gold coin of france, because of their mindless terror at the runaway inflation in the revolutionary currency that they had themselves created. Nobody with real power gives a shit about the "bad guys"; they just want their cut.

Bansters-in-my- feces's picture

Well Bruce I believe you deserve a explanation.

You go on to say how much other countrys money is laundered.

Well the way I see it every single dollar bill the USA creates is DIRTY LAUNDERED MONEY.

See what I'm getting at.

This makes the whole artical mute as to whose laundry is stinkier and dirtier.

Ps.....I guess I am a little pissed I have not seen the sun in months from your gov spraying the shit out me with chemtrails.

And not very kind with words.


Bruce Krasting's picture

It's okay. We all have to rant once in awhile.


My ex wife was convinced that chemtrails were a global conspiracy to control the weather. I tried, for years, to demonstrate that this was not correct, and that chemtrails, are just ice crystals that form from jet exhausts. They look white because of the sun.


Anyway, she didn't buy any of that. She also believes that aliens are regular visitors (they are nice folks, just curious). She also believes that cold fusion has already been figured out, but the "governments" are keeping this information hidden in an effort to protect the best interests of the oil, coal and gas companies. She thinks Obama is sitting on this info; the conspiracy on fusion goes back decades now.


In the end, it drove me nuts, but it was she who filed for divorce. Her grounds for divorce? Mental cruelty - go figure.....


Disenchanted's picture


Bruce said:


My ex wife was convinced that chemtrails were a global conspiracy to control the weather. I tried, for years, to demonstrate that this was not correct, and that chemtrails, are just ice crystals that form from jet exhausts. They look white because of the sun.


Chemtrails and contrails are two different things.

Chemtrails have nothing to do with jet engine exhaust.

Contrails do not linger for hours and spread out into an artificial chemical cloud cover. I've personally watched(and photographed) chemtrails doing just that.

I think chemtrails are a multi-purpose endeavor. One of the purposes is probably testing for this:

Weather as a Force Multiplier: Owning the Weather in 2025


Domestically(USA) we are guinea pigs in this testing...I've personally been observing this chemtrail activity in the Midwest USA since the mid to late 1990s.


Bansters-in-my- feces's picture

Bruce....your ex-wife was right.
Chemtrails are real.
And Fuck You...... with no sorry.
Wake the fuck up,now I see why ....ex -wife.

chindit13's picture

Your wright!  (as in two wrongs.....<<<<<-----over there).

Orly's picture

Please take your idiocy somewhere else.  And the vulgarity with it.

"Chemtrails" got their start from the US military using barium to see over the horizon on the battlefield with special radar.  Why would the general order the spraying over miles and miles of Earth knowing his daughter was down there?

I'm starting to think you're a very clever troll, "Banster."

Disenchanted's picture




"Why would the general order the spraying over miles and miles of Earth knowing his daughter was down there?"


'Good' Generals(yes men) follow the orders given them. Those giving those orders don't give a shit about the General or his children. If the General thinks they do, he's delusional.

However FWIW, I'm not convinced that chemtrail activities(as opposed to normal contrails...see my post above) are 100% military operations.

chindit13's picture

Two or three days ago I believe I was the primary source of mental cruelty, at least on this website.  My apologies to your ex if she happens to be a ZH reader (her moniker isn't "Clashfan", is it?).  I feel sorry Tyler had to see all those sad puppy dog eyes of people who felt betrayed that he allowed an infidel to take the stage.  Fellas, it's MY fault, not Tyler's!  Some of those whose frustration turned not to scorn but to proselytizing followed old Orde Wingate (chindit) to other threads, where frustration finally had me aver, "If Alex Jones told you that Men in Black I and II were actually documentaries, you'd believe him", or something to that effect.  Yes, it can all be exasperating.

An aside on gold.....if Zerohedge had been around in 1999-2000, I don't think we'd have as many PM threads nor even a thousandth of the "gold, bitchez!" comments.  For the most part it took 4 digits to get people's attention.  Gold did not, however, go from $250 to $1000 because somebody cut it with yeast and left it in a warm room.  That rise took buying, and lots of it, since 1999-2004 or so were the years Central Banks were dumping (e.g., Gordon Brown and Switzerland).  Somebody loaded up.  Bruce, I think you know who.  Back in my days managing funds all the "names" I knew were diversifying upwards of 10% of their wealth into PMs.  Many like to maintain that ratio, so they are now the source of sales.  Ironically, other than the retail set, who is the big buyer today?  Yep, the same demographic that sold to the HF guys ten years ago.  In a way isn't that a kind of laundering?

falak pema's picture

about women : a woman wrote an erotic poem back in 1932 to deride womens' predicament as being the sexual possession of their husbands, being totally mistreated in privy, (she described their existence discretely, alluding that their intimite life was like in a today's "hate/dominate" type porn video),  and her poem was published. She was immediately nailed to the pillory post by moral and literary circles. It was a poem written in a moslem country of that colonial era. (Imagine the adult Malalas of this world writing a similar one today! That tells you all about the current regression we are witnessing.)

If we read that poem today, (in first world), we would be ashamed at all the hate and outrage it raised then. After all she did have a clitoris that was truly hers and she made a mockery of male hubris and insensitivity! 

How our values have changed on this man-woman issue thingy and its not over yet; humanity has to come to the dark continent of third world where women's rights are non existent; more so in marriage! 

Its always refreshing to now have women nail men to the pillory post. Balance, hahaha, balance! 

Not that I am ashamed of my fascination of /attraction to womanhood, but that it bites the dust when it goes to "bang or bust", in our perennial one-way passion meme, seems to be a trend that puts the man-woman picture back in its right framework. Equal is that equal does, and may the two remain so charmingly different.

Let no man fear woman's derision with her panties down and her legs up! It is what we say to the womenfolk in similar situations about our male desire to thrust and not to rust in our own sauce. I'll drink to that.


Orly's picture

The yin of the species has a hidden, natural drive of her own, though, falak.

How many girls eschew the nice man and go for the bad-boy; to wrestle his his nonchalance into their lair with the intent to change him; to tame the wyld stallyn and claim a victory over the yang?

At the base of their actions is that complex and over-riding desire, no matter how far astray it may seem at the time, that is the bottom line.  If they can't do it in the bedroom, they'll do it in the courtroom or in the court of public opinion.

I cannot speak to women in the East who have their man chosen for them but they will inherently find the yang in someone not necessarily of their own choosing and expose it to the light of day in the hope that it withers and dies in her bosom.

Often, the more the "he" in him is exposed, the more violent will be the adverse reaction and he will, in turn, try to confiscate the yin and push it back in the bottle, most likely as the monkeys do it.  That is often the basis of "mental cruelty."

The domination matrix or the dominatrix all reside within these quarters and it has gone 'round and 'round all these centuries, as the lustful in Dante's second circle are blown about by the never-ending wind, never to be consoled and never to be understood.


tip e. canoe's picture

wow, that might be the most eloquent and succinct description of the eternal dance between the genders that i've ever read.   beautiful, orly. +696969

falak pema's picture

I'll have to chew on a piece of sugared ginger as I think about the yin and the yang playing at bang bang, instead of going hand in hand.


Orly's picture

In Chinese Medicine, they teach us that yin consumes yang and yang consumes yin.

Think of the Tai-Chi Tao (that black and white yin/yang picture...) not as a static illustration but an ever-moving and ever-evolving state of affairs between the two, such that, when the "picture" is put into motion, the lines become blurred and results in a sea of grey.

The Tai-Chi Tao shows:

Yin consumes yang and yang consumes yin (the fish eats the other's tail...).

Yin is contained within yang and yang within yin (the "eyes" of the fish...)

Both yin and yang contain all elements of the Universe (contained within the circle...).

Despite the ever-blending consumption and reformation, both yin (black...) and yang (white...) are two distinct and seperate energy levels that would either fly away or sink into the abyss were it not for the other.

While it can be thought of as male and female, it really means that yin is heavy, cold, dark, sinking, matronly, nurturing...

Yang is boisterous, heavenly, loud, hot, energetic and ignorant.


falak pema's picture

I feel very depressed for some reason; but I'll console myself with some bubbly, like it were a never ending sink of "feminine" deep, matronly nurturing that wants a slight taste of hot, spicy yanging.

All the while singing : pardon my ignorance! 

Orly's picture

To heighten the effect, you must grunt when you are "yanging," falak.


falak pema's picture

lol, that makes me feel light headed! 

FEDbuster's picture

Bruce don't you know "the truth hurts"?

thewhitelion's picture

For my part, I found this absurd.

"It certainly argues against gold backed money. That would make the bad guys rich."

As opposed to our current fiat system, where only the pure of heart prosper?

PS  I read everything you write Bruce, and I have learned quite a bit.

BigJim's picture

try imagining Obama saying it, then you might get what Bruce is talking about

bank guy in Brussels's picture

Bruce hath wrought some worthy thoughts, wrightly or wrongly


Two things come to mind re assets moving across borders

Common people in some countries - especially in the US - need to smuggle money out, not to avoid taxes, but to avoid extortion-confiscations via corrupt courts, legal system and government ... US residents have their assets being grabbed by judges and lawyers, and also police and government administrators ... with instant liens freezing things

That is an increasingly important under-the-media-radar issue, and morally much more significant ... People are being robbed of their small savings before they can become refugees and exiles

When they come to arrest Bruce Krasting in the US, what they will do is jail him for 'contempt of court' unless he agrees to sign over all of his assets in his home country of Switzerland ... and if they think Bruce has more assets than he says he does, they may jail him until he dies ... like a US man, Beatty Chadwick, in jail in the US for 14 years for 'contempt of court', no charges or trial ... lawyers said he had millions when he said he didn't, and the lawyers and bribe-taking judges wanted some of it

Lots of Europeans have gold, art etc. very quietly ... the Nazi occupation's 'economics' and asset seizures are not forgotten


Fascinating, appalling estimate, that for every 1 dollar given in 'aid' to a developing country, 10 dollars leave that same country in corrupt capital flight into offshore accounts ...

So on the one hand, the needs of common people to escape their corrupt governments, on the other the massive corruption of oligarchs fleeing with the capital of their nation's poor

What a mess

FeralSerf's picture

You are either one of The Elites or one of the livestock that is owned by The Elites.  Just as we can take our dog's rubber bone away from him anytime we wish, The Elites reserve the right to confiscate anything we may have saved.  Livestock own nothing.  If the livestock tries to hide their assets from their owners, they are criminal money launderers, embezzling the system.  The fuedal system is still alive and working.

You won't hear about Soros or one of his ilk being accused by The Elites' herders (read governments) of hiding their assets.

International transport has done a thorough job of stopping the livestock from hiding their assets, thanks to TSA.  The Elites, with their Gulfstream G-650s don't get screened.  No one checks to see if they have $10,000 or more when they leave or arrive into another country.

disabledvet's picture

You could argue that the only reason oil prices are "maintained" at so high a level is so that Wall Street itself can maintain its position as "chief money launderer." How much wealth has in fact been created through modern (circa 1980's and after) anyways? Certainly we've gone backwards (if you look at actual pay and tax receipts) going on thirty years now. The only constant has been a need to pay top dollar "for the goo" no matter what. And why? One reason is "so I can hide my ill gotten gains in a thing called a bank" comes to mind. Sure...the easiest way to rob a bank is to own...but the easiest way to rob a Government is to try and finance one as well. Seems to me the greatest fear of the "digitatii" is of prices correcting DOWNWARD. If that happens not only is your gold hoard worth "the mother lode" but so are all fixed assets. That would include of course "capital itself" since what is more fixed than "I need a billion dollars and I can only get it from..." In short while obviously it is entertaining to imagine "the bad guy's are getting away with it" in fact the reality is all money is traced....has a number on it...the Government knows exactly where all this cash is...and the best any of us can do is try to create NEW money in a world where "all is to be deflated before the mighty QE." Look no further than the American war effort...just another way to recycle deflating dollars yes? I mean can anyone here "define victory"? "10 trillion and two guys posting guard on the frontier" sounds about it to me. Don't get me wrong "when you open the hood you see there's a lot going on in there"...but going by "strictly appearances"...seems to me there's nothing going on..."save for the tidal distraction of our Age."

Bruce Krasting's picture

Yeah, me with all that Swiss RE. Ski house up in Davos. Nice place on the Gold Coast outside of Zurich (that one has the milk cows). Two apartments in Geneva - (talk about a hot RE market).


I could only wish......

dark pools of soros's picture

Nah, I was thinking you as more of a Costa Rican shark fin smuggler

FEDbuster's picture

I know of a nice beach house in Belize that should be on the market by now.  Owner accepting all cash offers, bring duffel bag to Miami.