Introducing "Trickle-Out Oligarch Economics" - How Over $21 Trillion In Wealth Fled Offshore

Tyler Durden's picture

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Before I get into the meat of this post, I want to make it clear that just because I point out the following doesn’t mean I like tax and think we need more of it. Rather, there are two main points I want to get across.

1) Oligarchs create tax loopholes for themselves. Oligarchs control the politicians who write legislation to suit oligarch needs. Whenever you hear politicians talk about taxing the wealthy they mean the suckers in the top 10% who are not politically-connected oligarchs. The super rich will never be touched by such legislation. They will always have loopholes available to them. This is why the statement “we need higher taxes on the rich” is basically a bullshit political talking point.

2) You’ll notice much of the wealth that has been moved offshore originated from dictators who bled their home countries dry of resources as their populations starved. Many of these dictators had the full support of the U.S. government throughout their decades in power, during which time they plundered and destroyed entire nations.

Just remember that the next time you hear a super rich person call for more taxes. They never mean on themselves. Second, understand that the root of the problem is systemic. There are no easy fixes, the entire system needs a total reboot.

From the Guardian:

The world’s super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy.


James Henry, a former chief economist at consultancy McKinsey and an expert on tax havens, has conducted groundbreaking new research for the Tax Justice Network campaign group – sifting through data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and private sector analysts to construct an alarming picture that shows capital flooding out of countries across the world and disappearing into the cracks in the financial system.


Using the BIS’s measure of “offshore deposits” – cash held outside the depositor’s home country – and scaling it up according to the proportion of their portfolio large investors usually hold in cash, he estimates that between $21tn (£13tn) and $32tn (£20tn) in financial assets has been hidden from the world’s tax authorities.


“These estimates reveal a staggering failure,” says John Christensen of the Tax Justice Network. “Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people.


“This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich.”


In total, 10 million individuals around the world hold assets offshore, according to Henry’s analysis; but almost half of the minimum estimate of $21tn – $9.8tn – is owned by just 92,000 people. And that does not include the non-financial assets – art, yachts, mansions in Kensington – that many of the world’s movers and shakers like to use as homes for their immense riches.

Since this doesn’t include non-financial assets, you can be sure the actual number is multiples higher. We have all seen how oligarchs worldwide are using houses and other tangible assets as overseas bank accounts. Recall:

Welcome to Arcadia – The California Suburb Where Wealthy Chinese Criminals are Building Mansions to Stash Cash

Introducing “Freeports” the Latest Way for Oligarchs to Store Their Assets

Introducing Ghost Skyscrapers – NYC Real Estate Goes Full Retard

In many cases, the total worth of these assets far exceeds the value of the overseas debts of the countries they came from.


The struggles of the authorities in Egypt to recover the vast sums hidden abroad by Hosni Mubarak, his family and other cronies during his many years in power have provided a striking recent example of the fact that kleptocratic rulers can use their time to amass immense fortunes while many of their citizens are trapped in poverty.

Mubarak, a close ally of the U.S. government all the way until he was toppled.

The world’s poorest countries, particularly in sub-Saharan Africa, have fought long and hard in recent years to receive debt forgiveness from the international community; but this research suggests that in many cases, if they had been able to draw their richest citizens into the tax net, they could have avoided being dragged into indebtedness in the first place. Oil-rich Nigeria has seen more than $300bn spirited away since 1970, for example, while Ivory Coast has lost $141bn.


Assuming that super-rich investors earn a relatively modest 3% a year on their $21tn, taxing that vast wall of money at 30% would generate a very useful $189bn a year – more than rich economies spend on aid to the rest of the world.


The sheer scale of the hidden assets held by the super-rich also suggests that standard measures of inequality, which tend to rely on surveys of household income or wealth in individual countries, radically underestimate the true gap between rich and poor.


Milorad Kovacevic, chief statistician of the UN Development Programme’s Human Development Report, says both the very wealthy and the very poor tend to be excluded from mainstream calculations of inequality.


“People that are in charge of measuring inequality based on survey data know that the both ends of the distribution are underrepresented – or, even better, misrepresented,” he says.

What we need is fundamental systemic change. This means truly restructuring the entire financial system, from Central Bank power, to Wall Street funding both political parties, to lengthy jail sentences for financial criminals. If we do that, oligarchs won’t be able to parasitically amass billions so easily in the first place.

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HonkyShogun's picture
HonkyShogun (not verified) Jul 27, 2015 9:49 PM

That's Anti-Semitic!

Money Counterfeiter's picture
Money Counterfeiter (not verified) HonkyShogun Jul 27, 2015 9:53 PM

Gold or silver, pick one

Harlequin001's picture

Spot on. Put gold back in money and they can't create it from nothing.

The thieving stops. Dead.

ZerOhead's picture

Abolish the right of private bankers to create our money supply out of thin air in the form self enriching debt.

Tell them to fuck off and take their illegal Federal Reserve and their G20 Central Banks with them...

ConfederateH's picture

The oligarchs don't need loop holes.  They just tell their cock-suckers at the IRS to fuck off or die.   The IRS, being who they are, obey and then pucker up their anuses.

Also, notice that in all the reporting of the UBS "tax scandal" not one significant rich person was caught.  It wasn't loop holes that got them off.  Its kind of like all of terrorist/no fly lists that the government maintain, except these lists are the "get out of jail free" lists.

Four chan's picture

are apple and ge oligarchs?

SWRichmond's picture

the fact that kleptocratic rulers can use their time to amass immense fortunes while many of their citizens are trapped in poverty.

So maybe someday we'll learn that "ruling" is merely an excuse for "looting", and realize that, since we don't really need "looters", we don't really need "rulers", either.

doctor10's picture

Yep. All the squirreliness about OBama's social security number is a real eye opener.

I'd expect he was the tip of the iceberg of a bunch of oligarchs that have figured out how to have removed themselves from the IRS computers completely

The powers that be were caught with their pants down on that one.

HopefulCynical's picture

Link, please? Haven't heard about this one.

Luc X. Ifer's picture

These numbers are so damn close to USSA debt - just a (weird) coincidence besides that the suckers behind are going to pay the bill?!

HonkyShogun's picture
HonkyShogun (not verified) jcdenton Jul 27, 2015 10:57 PM

True but "Anti-Khazarite" doesn't have the same ring to it. Nor any effective shock power.

Klemens's picture
Klemens (not verified) HonkyShogun Jul 28, 2015 12:06 AM

there is a good Anti-Khazarite book:  "The Synagogue Of Satan"


Marco's picture

The Jews in Israel for the most parts aren't the super-rich, they are just the useful idiots playing out the Zionist dream of Jews in the US.

Moribundus's picture

Israeli Historian: Palestinians Are Biological Descendants of Bible’s Jews.

It was Pelesets/Pelestes who were taken into Egypt by egyptian pharoh Ramesse follow defeat of SEA PEOPLE.  

10 commandements are taken from chapter 125 of Egyptian book of dead. Abraham was Ibrahim Zeradust he came to area of middle east after Saraswati river disaperance. Story of Noah is vedic story of Manu. There was wave of people from asia after Saraswati river cataclism ( one earth's plate get under another ) who show up in biblical area and Egypt: Hyksos, Mittani= ( spoke sanskrit got vedic gods, Nefertiti was Mittani princes); and Hitites in Hattusha. More or less Troy itself. so doctrines in bible are not original and were brought in. There is story that Akhenaton was Moses. But no doubt he was influenced by vedas.


DanDaley's picture

And most Jews alive today, especially in Israel, are not true Semites:


There is no such thing as a true semite to begin with. Semite simply refers to many linguistic groups that were supposedly descended from the Biblical son of Noah, Shem. To imagine that there was any sort of genetic purity to these groups is simply wrong, and probably born of an infantile need to categorize people into static designations so as to make the world more easily understandable. To imagine further, that the loose genetic information of any particular population group somehow affects the behavior of any individual, is idiotic.


Let the down-voting begin!

Seek_Truth's picture

What is idiotic is to ignore all of the studies that have been done on identical twins that were raised in separate families, didn't know of each other because of adoption and yet their characteristics and behaviors were so similar that was truly amazing- proving that there is a genetic reason why people behave the way they do. IQ test also prove genetic linkage.

DanDaley's picture

True, identical twin studies do demonstrate that certain behaviors seem to have a genetic component -after all, identical twins are exactly the same genetically. Nevertheless, over the expanse of 10s or 100s of millions of people who are NOT genetically identical (for example, the so-called semites), to suggest that one can attribute specific behaviors to simply being a member of that group is ludicrous; there is just way too much genetic variability. Also, the whole notion of a population group is a rather nebulous construct. So-called groups are always interacting with other groups, importing and exporting genetic material through migration, conquest, and trade.

junction's picture

As tens of billions of dollars were illegally off-shored by America's secret rulers, AG Eric Holder was going after luncheonette owners and the like for "money laundering" for depositing less than ten thousand dollars in cash into business accounts that held under $30,000.  Holder's degenerate U.S. Attorneys couldn't go after the Sinaloa drug cartel billions in HSBC accounts, those drug lords work with the DEA and Obummer's NWO advisors. 

MsCreant's picture

Common! Give Eric a break. He is scared of real power.

doctor10's picture

good luck.

The banking mechanisms governments use to fleece their citizens can be exploited by those designing the systems.

Corporate mechanisms to fleece a citizenry are aided and abetted by governments and are exploited by those legislating and implementing these systems.

In addition, both banking and corporate fleecing scams require guys on the ground in each country making it happen.

So there becomes a triumvirate of interlocking interests that weave regulatory and tax legislation and enforcement to keep the locals nose to the grindstone while they spirit away their output.

21st century slavery beats the snot outta anything the 19th century could come up with.

illyia's picture

Is that not the challenge, though. To figure out a way to either: reorganize the "system" such that the "off-shore" wealth is revealed - and so is its money trail and/or make such a complete change to the system that the oligarchs are unable to buy in with what they have stashed. I do not know the answer. But I think I've correctly identified the problem.

The solution is better than bitcoin, free from past manipulation and non-counterfeitable (gold is full of past manipulation, but it might play a part), What measure of wealth/store of value would prohibit the oligarchs from using their ill-gotten gains in the new system?

Electronic is ? Hackable ? Bribeable ?

Smart ZH'ers ought to know this...

Omega_Man's picture

nooo, we need to take the wealth they stole... back.

BoPeople's picture
BoPeople (not verified) Jul 27, 2015 9:57 PM

If by oligarchs you mean the "clever ones" who have the monopoly on creating money out of thin air, trading it for things of value and then taxing all of the world's productive labor, I agree. They add no value to the world and no one would miss them if they were gone.

However, I am one of those people who gets satisfaction out of working and creating and don't really care much for money because it is used by parasites to enslave the masses on this world. I would rather be a happy and creative slave than a parasitic douche bag.

If no one gave a damn about their fiat money they would lose all power.

BoPeople's picture
BoPeople (not verified) Dragon HAwk Jul 28, 2015 8:42 AM

There are some very good things about being broke... bad things too. But the bad things are only bad things because of the way the "clever ones" have designed their system.

MsCreant's picture

It would be fun if, in the Caribbean they decided to, you know, nationalize the banks!

"All your funds are belong to us!" 

"Help me, I want my trillions!"

"Fuck you, fucker! We say you stole it."

"I'll sue."

"Go for it, pretend we give shit while you are at it. Asset forfeiture, baby. We are suspicious of how you got all this."


WillyGroper's picture

Listening to Jim Willie the other day, he said the maggots that have stolen all the gold have themselves been rehypothecated. True or not... it's a lovely thought.

Dropping out, self sufficiency, barter and reducing every aspect of their system is the only way to make a difference. We can bitch to high heaven. Action is what it's going to take.

On another thought, should the magnetic pole shift hit the fan, that too, could level the playing field. Just might render their hidey holes redundant. That is of course unless they lurk under water.

Scroll down to Chet Snow's map. It's the model the navy uses.


BoPeople's picture
BoPeople (not verified) WillyGroper Jul 28, 2015 8:45 AM

I have no use for gold.

The money in the Caribbean only exists as electronic entries. Wipe the computers and back-ups and it just goes away.

BuddyEffed's picture

The Carribean places are their playgrounds and the palms are well greased.  Nationization would be crazy talk.

Plus one guided missile frigate could seize control back with no boots ever touching the ground.

detached.amusement's picture

...and the island would be taken over by the "military" faster thn you could say rumplestiltskin...

warsev's picture

I'm struggling to find the point of this article. Is the author arguing that international law should prohibit individuals from moving their assets outside of their native countries? Good Gawd. Be careful what you ask for. You're likely to get it.

MsCreant's picture

Agree, instead of more government, we need to enforce the rules on the books already, then see how it all looks. Lots of crime that can be proved if only they prosecuted it.

Lumberjack's picture

My guess is that the expense of prosecuting many of these cases would be the same as the GDP of small countries. Besides the courts and politicians are already bought.

detached.amusement's picture

and surely they'd be stared at by a "judge" with a gold rimmed war flag behind him

saints51's picture

Author sounds like a commie to me.

JR's picture

You’re confusing American patriots who are so concerned about their national economy that they would move to foreign investments with world class international criminals. These oligarchs are not your average citizen; they are thieves taking in gigantic amounts the estates and labor of their countries for their own benefit and power; and it’s not their money they're taking, it’s your money.

If you want a portrait of an oligarch take a look at George Soros. Would you defend his right using his insider status to steal billions and bankrupt countries, tax free?

Russia's most prized assets were sold off after the fall of the U.S.S.R. to a small circle of vultures - later known as oligarchs – for a smidgeon of their value. The same is happening in the United States and the EU, a process enabled by largely Jewish ownership of and open access to the currency - the Fed and the U.S. Treasury. It is legalized plunder, and now they’ve made it nontaxable.

And when the law finally runs some of these oligarchs down, many take political asylum in Israel.

As for my two cents, powerful and long overdue article, Mike.

warsev's picture

And what, exactly, do you propose as a remedy? Seriously, I'm interested. I see your point. I just don't see a cure that's better than the disease.

JR's picture

You are in luck, I have the answer.  The people, exploited by a monetary system that has devised a corrupted currency to use against them, are going to rise up and put a stake through the heart of it – the Federal Reserve System.

Paper money is tryanny.

The middle class is going to turn on the political system that enabled this tyranny, on a Congress that turned over control of the nation and her resources in 1913 to a money trust of international bankers that owned one-fourth the world’s wealth for a century of looting and displaced power. Why? Because if the peope want to remain free, they must. It is the Congress, elected with Fed money, that then passed the 1965 Immigration Law, written and pushed into law by a team of Jewish lawmakers and activists to divide the nation into warring diverse groups of First World and Third World peoples. Its aim was to destroy the nation’s sovereignty and her white Christian culture and to push her into a socialist global government - making the world so ethnically weakened it would be "safe" for banker control. And it is the Rothschild-controlled Fed and the zillions it prints out of thin air that provides them with plenty of money to do it.

“It comes down to this.  If you hate war, oppose the Fed. If you hate violations of your liberties, oppose the Fed. If you want to restrain despotism, restrain the Fed. If you want to secure freedom for yourself and your descendants, abolish the Fed.” Lew Rockwell, “War and Inflation”


“The shareholders of these banks which own the stock of the Federal Reserve Bank of New York (which sets the interest rates and directs open market operations, thus controlling the daily supply and price of money whose stockholders are the real directors of the entire system) are the people who have controlled our political and economic destinies since 1914.

“They are the Rothschilds, of Europe, Lazard Freres (Eugene Meyer), Kuhn Loeb Company, Warburg Company, Lehman Brothers, Goldman Sachs, the Rockefeller family, and the J.P. Morgan interests (Rothschild).” --  Eustace Mullins, The Secrets of the Federal Reserve, p. 34. Copyright 1983

TeethVillage88s's picture

Need online Protest for a Central Bank Forum and to ask the FED and all it's branches

"FED, What was the Promise that you offered the People of the USA as a Central Bank?"

Wasn't the Promise supposed to prevent Moral Hazard and High Federal Debt Levels that would cause downgrade of Financial Ratings for anyone other than a Superpower?

Hasn't the FED, the US Central Bank Failed in it's Promise to ensure Conservative Banking, Accounting, Auditing, and Financial Ratings.

Today isn't the FED Running a Racket?

What are all the Functions and Purposes of the FED, it is a Simple Question??

And how is it that US Banks and Financial Markets are Self Regulated, but there is no Public Forum to raise complaints and publish Criticisms and for activists to create change for Main Street and to keep the system fair for small banks in a time when there are fewer and fewer banks each year and power is more and more concentrated on Wall Street TBTF.

OldPhart's picture

So my years of hoarding gold/silver, expecting to be able to BTUFD (Buy the Ultimate Fucking Dip) on practically anything using the metal, is considered plunder?  (Not that I have anywhere near the assets of a millionairre or any status of any sort)

Then why are we buying the fucking gold and silver?!

Glorious Kataifi's picture

Is the author arguing that international law should prohibit individuals from moving their assets outside of their native countries? Good Gawd.

Why would anybody argue that, when the unrestricted mobility of capital has proven such a roaring success?

Look how far it has brought us. We even got a chance to repeat the 1930s, which was everybody's secret dream.



detached.amusement's picture

You forgot the "stealing" and "usury" parts that predece the flight.

Ms No's picture

Anybody here ever have the pleasure of meeting crazy Robin?  This one is juicy, even a suicide.

This is my favorite part:  “The cast of characters grew to include a swindled Scottish scientist, a mysterious Malaysian businessman, a Yugoslav prince who committed suicide on the company’s premises, and (the company)’s former corporate secretary, who later appeared in a pornographic video and is, she says, a witch.”


q99x2's picture

Export your billionaires to Q99X2. We'll take care of them.

To the pyramids. To the pyramids. To the pyramids.

Seriously it is insane to allow individuals or corporations to have wealth with today's tech. It is suicidal.

Cabreado's picture

Surprised at the pissing-in-the-wind...

"What we need is fundamental systemic change."

No, what we need is restoration of rule of law,

and that would require focused attention on persons (they have names) in places of control who disregard it.


r00t61's picture

The system is working as intended.

Corruption is a feature, not a bug.

Tall Tom's picture

The "Rule of Law" is what brought us to this point.


Restoring it will not prevent this from happening again.


You have heard it said, and quite accurately, that if you were to distribute the wealth of the World evenly...within a few years the wealthy will own it and you will have massive poverty amongst the masses.


When are you going TO WAKE THE FUCK UP and LEARN that you cannot legislate Nature and Natural Laws away?


Humans, those disgusting filfthy creatures, are an advanced form of HERD ANIMAL who are Genetically HARDWIRED to follow an ALPHA LEADER.


Civilization is just a veneer, a thin one at that, which is fragile at best and non existent at worst.


Laws DO NOTHING to change that basic nature.


THERE IS NO HOPE. So put down the Hopium Pipe and STOP IT as you are setting yourself up for a bitter disappointment.

Marco's picture

Indeed there is no hope, when the veneer falls away you won't find your rulers ready to let you live your life in peace in your compound in the rockies either. Unless you have a nuclear weapon stashed away to engage them in a nuclear detente don't put much faith in your peashooters ability to save you, the drones can aim faster than you.

Elysium is coming, most people will long for the days of this veneer.

erk's picture

The solution is simple, stop the creation of crazy amounts of phoney fiat money like that, all it does is polute the pool of real money.