2011 February 11 Friday
Why Should A Dictator Hang Onto Power?
Why hang on when you've been in power for decades? Don't you have enough money in the bank by then to enjoy an extremely wealthy retirement? Only once you lose power will the Swiss seize your bank accounts. So staying in power protects your money.
In Switzerland, the government said it had frozen assets which possibly belonged to Mubarak. There have been unconfirmed reports he has amassed a fortune running into tens of billions of dollars.
"I can confirm that Switzerland has frozen possible assets of the former Egyptian president with immediate effect," government spokesman Lars Knuchel said, declining to specify how much money was involved.
You might ask why the Swiss held off from enforcing their law about ill-gotten gains until after a dictator was forced to give up the reins of power. Hmmm...
The ousted President of Tunisia got the same treatment from the Swiss.
Last month, the Swiss froze the accounts of Mubarak's ally, ousted Tunisian president Zine El Abidine Ben Ali, whose overthrow inspired the first protests in Cairo.
So if you think your hold on power is weakening it is time to start transferring your money to Macao or the Caymans or some other place that doesn't rush to grab your cash the day you fly away from your capital in one of your private jets.
The Mubarak family has spread their risk of asset seizure around to many enclaves for the rich and powerful.
The Mubarak family reportedly owns properties around the world, from London and Paris to New York and Beverly Hills. In addition to homes in the Red Sea resort of Sharm al-Sheikh and the upscale Cairo district of Heliopolis, they also have a six-story mansion in the Knightsbridge section of London, a house near the Bois de Bologne in Paris and two yachts.
Dictators obviously need to diversify their holdings and avoid Swiss banks. But they become too confident and complacent about their hold on power. In the future as China lets its currency become a global trading currency Chinese banks might emerge as safe havens for dictator deposits. Also, assorted offshore banking countries should get more attention given the Swiss sunny day friend attitude.
Update: You can tell which semi-toppled leaders are really losing power permanently because Swiss asset seizures serve as a useful measure of whose hold on power is definitely going to end.
Other dictators have lately found themselves frozen out by the Swiss as well. For instance, the government has frozen the assets of Laurent Gbagbo, the president of Cote d'Ivoire, who lost a November presidential election but has refused to step down.
So if Swiss banks start seizing your accounts you'd better get to your private jet and fly to a country that will accept you as a retiree.
I'm shocked, shocked! that you can't trust bankers that have vaults of gold teeth.
Thing is, $40 billion or whatever he has/had squirreled away is simply stupidly excessive for a man of 84. What does that get you that a mere tenth of the money wouldn't? Extra bragging rights when talking to Saudi princes? Obviously he wants to provide for his descendants but even there it's more than appears useful. Testament to human greed and the mania for power.
you can't trust bankers that have vaults of gold teeth.
It certainly suggests that you'd better cash out before you get deposed. Mubarak just wasn't smart enough to do that. Dictators apparently have a certain amount of trouble believing that their reign can end (or perhaps when their imagination fails is when they start being at risk for removal...).
Chinese banks might emerge as safe havens for dictator deposits
I doubt it. I just don't think a Chinese banker could be trusted to hold on to $40 billion and return it no muss no fuss. Too much focus on short term profit, too low trust a culture. The Japanese maybe? But diversification is obviously the best answer - not only does it spread the risk but it should reduce the temptation on the part of each individual institution to screw you.
Anyway, all said and done, I was happy to see that they seized his stolen money. He sure as hell didn't earn it. Hope it finds its way back to the Egyptian people (fat chance, about as likely as having it returned to the American taxpayer from whence it came).
Switzerland, Caymans, etc. should be embargoed until they stop aiding corruption and tyranny.
Uh, we sent Mubarak like $3-4 billion a year more or less so he'd behave, and I doubt it was somehow unknown to the State Department that he was taking a big piece of that pie for himself. Seems like we would need to cast out the beam from our own eye first before worrying about the Swiss and others providing no-questions-asked banking services.
"You might ask why the Swiss held off from enforcing their law about ill-gotten gains until after a dictator was forced to give up the reins of power. Hmmm..."
Kicking a man when he is down.
Seriously, the guy is no longer alpha, so he gets treated accordingly.
This is how social animals function.
It is all about status.
"I'm shocked, shocked! that you can't trust bankers that have vaults of gold teeth."
Now that's a statement.
"Switzerland, Caymans, etc. should be embargoed until they stop aiding corruption and tyranny" and "I'm shocked, shocked! that you can't trust bankers that have vaults of gold teeth."
Refer to Randall's original post, where it states: "The Mubarak family reportedly owns properties around the world, from London and Paris to New York and Beverly Hills."
What are Goldman Sachs bonuses up to now? Mark my words, Mubarak and his kin will be welcomed with open arms at the finest restaurants on the Upper East Side.