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.