Moneyland | Oliver Bullough

Summary of: Moneyland: Why Thieves and Crooks Now Rule the World and How To Take It Back
By: Oliver Bullough

Introduction

Embark on an eye-opening journey into the world of offshore financial havens, corruption, and the exploitation of the post-World War II international financial system in ‘Moneyland’ by Oliver Bullough. This summary will uncover how the unstable regulations and the rise of eurodollars and eurobonds paved the way for a more aggressive global market. It will also explore how small offshore havens became breeding grounds for financial crimes, while delving into the rampant corruption of ruling elites in some of the world’s poorest countries. Unveiling the realities that transcend national borders, the book sheds light on both the past and present situations, including the diminishing Swiss financial secrecy and the emerging role of US states as international tax havens.

The Rise of Eurodollars and Eurobonds

Prior to World War II, the global financial market was unregulated and caused social and economic instability, leading to the war outbreak. The Allied powers aimed to prevent this by tying national currencies to the US dollar and allowing only long-term investments. However, bankers found loopholes to exploit these new regulations, leading to the creation of eurodollars and eurobonds. Eurodollars flowed among countries just like before, and eurobonds had tax-free profits and anonymity for buyers. These financial innovations uprooted the Allied powers’ postwar stabilization framework, leading to a more aggressive global financial market.

The Secrets of Offshore Havens

Imagine you’ve embezzled a few billion dollars, where would you hide the money? Offshore havens like Nevis are the perfect place. Nevis transformed into the ideal location to stash secret assets by not recognizing foreign court judgments and having a confidentiality ordinance to prohibit sharing financial information. Unfortunately, Nevis isn’t unique; other islands like Jersey with FIMACO, a shell company that received billions of dollars, serves no purpose. The FIMACO case exposed widespread corruption with officials using hidden funds to finance lavish lifestyles.

The Cost of Corruption

In Angola, where over 80% of the population lives in poverty and life expectancy is only 42 years, corrupt politicians enrich themselves while denying the country’s citizens basic necessities. Wealthy individuals, such as a government minister, can spend exorbitant amounts of money on luxury goods in a country where the average salary is only $3,000 a year. Despite warnings from organizations like Global Witness, corruption continues, with billions of dollars disappearing from the budget and officials accepting bribes. This is not a unique issue, as many other countries also suffer from corruption, but it is a pressing reminder of the inequalities between those in power and the vulnerable population they are meant to serve.

Borders Cannot Contain Corruption

National borders collapse in the face of kleptocracy, as demonstrated by the murder of Alexander Litvinenko, a former KGB agent, in the UK. Litvinenko had emigrated to the UK and continued to share information about dangerous Russian magnates and politicians with private investigators. He was killed by acquaintances who had already fled back to Russia. The murder was clearly orchestrated by high-ranking individuals in the Russian government, and since then there have been many other similar incidents in the UK with indications of Russian involvement. Despite these crimes crossing borders, investigations have been hindered by the lack of cooperation from Russian authorities. The message is clear––exposing the crimes of kleptocrats can put individuals in danger no matter where they are in the world.

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