The Real Cypriot 'Blueprint' - How To Confiscate $32 Trillion In 'Offshore Wealth'

thenews 2013.05.07 16:57

The Cypriot deposit confiscation has come and gone (and in a parallel world in which the global Bernanke-put never existed and in which bank shareholders were not untouchable, this is precisely how real-time bank restructurings should have taken place), but fears remain that the country's "resolution" mechanism will be the template for future instances of "resolving" insolvent banks. That may or may not be the case: the only way to know for sure is during the next European bank bailout, but one thing is certain - Cyprus was certainly a template when it comes to how a world full of insolvent sovereigns (all engaged in currency warfare), where easing, quantitative or otherwise no longer works to boost the economy, will approach what is the last chance for monetary replenishment - taxation of financial assets, just as we warned first back in 2011. Specifically, Cyprus showed the "template" for confiscating Russian oligarch billionaire "ill-gotten", untaxed cash, which many in Germany demanded should be the quid for ongoing German-funded quo. And here's the rub. There is more where said "ill-gotten" cash has come from. Much more... $32 trillion more.

An estimate by James Henry, senior advisor of Tax Justice Network, confirms that the Cypriot confiscation template will certainly be used again and again for one, or 32 trillion simple reasons: the amount of illicit, off-shore held wealth, to which the proprietors have zero recourse in a world in which the war against tax evaders has gone both nuclear and global, has grown to stupendous levels. To wit: "A significant fraction of global private financial wealth -- by our estimates, at least $21 to $32 trillion as of 2010 -- has been invested virtually tax-*free through the world's still-*expanding black hole of more than 80 "offshore" secrecy jurisdictions."