Azerbaijani Laundromat

What is the Azerbaijani Laundromat?

A scheme to curry influence, pay lobbyists, apologists and European politicians and to launder cash. The $2.9bn (£2.2bn) operation ran between 2012 and 2014 – meaning that on average $3m was channelled out of Azerbaijan every day. The source of money isn’t always clear, but it comes from companies linked to Azerbaijan’s president, Ilham Aliyev, state ministries and the International Bank of Azerbaijan, the country’s largest bank, which recently filed for bankruptcy protection. The cash was transferred into four offshore-managed UK companies. From there, it was spent in various countries, including Germany, the UK, France, Turkey, Iran and Kazakhstan.

How was it done?

By clever use of the west’s financial system. Danske, Denmark’s largest bank, handled the payments via a small branch office in Estonia. It noticed nothing amiss. The organisers of the scheme exploited Britain’s weakly regulated company system. They registered four firms at Companies House in London. These were Hilux Services, Polux Management, Metastar Invest and LCM Alliance. The first two were incorporated in Glasgow, the third in Birmingham and the fourth in Hertfordshire. The beneficial owner of the firms is a secret.

— source | Luke Harding, Caelainn Barr and Dina Nagapetyants | 17 Aug 2022

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Why the Banking System is Breaking Up

The collapses of Silvergate and Silicon Valley Bank are like icebergs calving off from the Antarctic glacier. The financial analogy to the global warming causing this collapse is the rising temperature of interest rates, which spiked last Thursday and Friday to close at 4.60 percent for the U.S. Treasury’s two-year bonds. Bank depositors meanwhile were still being paid only 0.2 percent on their deposits. That has led to a steady withdrawal of funds from banks – and a corresponding decline in commercial bank balances with the Federal Reserve.

Most media reports reflect a prayer that the bank runs will be localized, as if there is no context or environmental cause. There is general embarrassment to explain how the breakup of banks that is now gaining momentum is the result of the way that the Obama Administration bailed out the banks in 2008. Fifteen years of Quantitative Easing has re-inflated prices for packaged bank mortgages – and with them, housing prices, stock and bond prices.

The Fed’s $9 trillion of QE (not counted as part of the budget deficit) fueled an asset-price inflation that made trillions of dollars for holders of financial assets, with a generous spillover effect for the remaining members of the top Ten Percent. The cost of home ownership soared by capitalizing mortgages at falling interest rates into more highly debt-leveraged property. The U.S. economy experienced the largest bond-market boom in history as interest rates fell below 1 percent. The economy polarized between the creditor positive-net-worth class and the rest of the economy – whose analogy to environmental pollution and global warming was debt pollution.

But in serving the banks and the financial ownership class, the Fed painted itself into a corner: What would happen if and when interest rates finally rose?

In Killing the Host I wrote about what seemed obvious enough. Rising interest rates cause the prices of bonds already issued to fall – along with real estate and stock prices.

— source | michael hudson | Mar 12, 2023

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Solving the Debt Crisis the American Way

On Friday, Jan. 13, Treasury Secretary Janet Yellen wrote to Congress that the U.S. government will hit its borrowing limit on Jan. 19, forcing the new Congress into negotiations over the debt limit much sooner than expected. She said she will use accounting maneuvers she called “extraordinary measures” to keep U.S. finances running for a few months, pushing the potential date for default to sometime in the summer. But she urged Congress to get to work on raising the debt ceiling.

Lifting it above its current $31.385 trillion limit won’t be easy with a highly divided and gridlocked Congress. As former Republican politician David Stockman crowed in a Jan. 11 article:

15 [House] votes and the slings and arrows of MSM opprobrium were well worth it. That’s because the GOP’s anti-McCarthy insurrection obtained concessions which just might slow America’s headlong rush to fiscal armageddon. And just in the nick of time!

We are referring, of course, to the Speaker elect’s promise that there will be no more debt ceiling increases without off-setting spending cuts; and that in the event of a double-cross a single Member of the House may table a motion to vacate the Speaker’s chair.

Even if Congress succeeds in raising the debt ceiling, the Federal Reserve’s aggressive interest rate hikes are likely to push interest on the federal debt to unsustainable

— source | Ellen Brown | Jan 20, 2023

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FTX & The Joke of Democracy

This is what I think of as a signpost article – it points you to something the mainstream media is deliberately not giving the prominence it needs, but I have no personal expertise or inside knowledge to give you. I am just giving you a start to get going. Several readers will have a much better understanding than I, and I encourage you to give your thoughts in comments below.

It is also worth noting that only the immediate improvement to freedom of speech on Twitter by Elon Musk has brought this to my attention. Several sources – particularly Citizens for Legitimate Government – have suddenly appeared in my feed again after being entirely suppressed.

My own tweets are, for now, less suppressed – my own family have been receiving notifications from me after they were stopped for over a year. I am not in general a fan of billionaires like Musk, and I do not know where Twitter will settle, but there is undoubted initial improvement.

The FTX story seems truly remarkable. From being founded only in 2017 it rose to be a “partner organisation” of the World Economic Forum and the second largest donor to Biden and

— source | craig murray | Nov 15, 2022 |

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Regulate Crypto or It’ll Take Down the Economy

The dramatic collapse of Sam Bankman-Fried’s crypto exchange, FTX, may have come as a shock to the Miami Heat, Tom Brady, Twitter bots and financial-news talking heads. But crypto is following a well-worn path of financial innovations, such as subprime mortgages and credit-default swaps, that began with dazzling rewards and ended with crippling losses.

Proponents say crypto holds great promise for making the financial system more efficient and inclusive. Maybe. But we’ve heard that story before. History is littered with financial schemes promoted by criminals and charlatans who claimed that the latest and greatest tools had evolved beyond the need for regulation or a cop on the beat. During the 2008 collapse and every financial crisis before that, these claims have proved dangerously delusional. Crypto is no exception.

FTX’s implosion should be a wake-up call. Regulators must enforce the law before more people get cheated, and Congress must plug the remaining holes in our regulatory structure—before the next crypto catastrophe takes down our economy.

— source | Elizabeth Warren | Nov. 22, 2022

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Why in the hell did we need cryptocurrency?

Let me ask you something: Let’s say you have a lot of money, or even just a moderate, middle-class amount of money, and you’re looking for someplace to keep it. I mean, you don’t just leave money sitting around on the kitchen counter or on a side table next to you on the couch so you can reach over and fondle it as you watch the ads for stuff you don’t need, like a Peloton bike, because you already took the one you bought a couple of years ago and put it in a friend’s garage sale and managed to get 20 bucks for it, so now you have yet another 20 bucks to add to the money you were already looking for a place to keep.

You could put all your money, including the Peloton $20, in a bank. Of course, if you walk in with a wad of cash and ask for a deposit slip and make a big deposit, that might garner you some perhaps unwanted attention, but hey! A bank is a bank and that’s what they’re supposed to do, right? Take your money and keep it for you so you don’t have to worry about somebody coming into your house while you’re sleeping and take it from you.

Alternatively, you could put your money to work for you. I’ve always loved that phrase, usually delivered by a friend offering you what he thinks is good advice on an occasion or

— source | Lucian K. Truscott IV | Dec 10, 2022

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How Germany’s Fraudulent Fintech Star Was Exposed

Wirecard CEO Markus Braun was “The Godfather” of an elaborate scheme to defraud investors in the fintech star Wirecard, a former German lawmaker told DW ahead of the opening of a trial into the scandal on Thursday.

Fabio De Masi, a former lawmaker for Germany’s socialist Left Party who sat on a parliamentary inquiry into the Wirecard affair, said “Mr. Braun was not a victim but The Godfather of the criminal operation.”

De Masi recalled parliament’s 675-page report on Wirecard, published last year, that established that Braun was involved in signing off on funds to third-party firms despite warnings that he was giving away “the last liquidity of Wirecard.”

What was Wirecard?

Wirecard was once the poster child for Germany’s financial technology sector. The firm began life in 1999 as an online payment processor for porn and gambling websites and grew a

— source | Nik Martin | 08/Dec/2022

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The Deeper Malaise Behind Rupee’s Free Fall

On September 23, the value of the rupee vis-a-vis the dollar fell to a new low: it crossed Rs 81 to a dollar after some weeks of relative stability when it hovered between Rs79-80. And it fell despite the Reserve Bank’s running down of foreign exchange reserves in a bid to hold up its value.

In fact, foreign exchange reserves had reached their highest level in October last year, but since then there has been a decline by over $90 billion until September 23 to just below $550 billion. A part of this decline is because of revaluation: reserves are held in several currencies apart from the dollar, and the decline in the value of the euro vis-a-vis the dollar has been a contributory factor to the fall in the dollar value of our reserves. But the bulk of the fall has been on account of the RBI’s selling off dollars to hold the rupee stable. And yet the rupee has fallen.

With the rupee’s fall our imports become costlier, especially universal intermediaries like oil, whose dollar price in any case has increased in the world market in the wake of

— source | Prabhat Patnaik | 01 Oct 2022

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