Re: Cato forum tomorrow: should money laundering be a crime?

-----BEGIN PGP SIGNED MESSAGE-----
Hash: SHA1

Steve Schear wrote:
>This topic, of course, is near the top of many libertarian e-commerce 
>agendas.  Almost every mainstream news article and regulatory report repeats 
>the littany that Money Laundering, that is the movement of money to disguise 
>it origin (even if there are no predicate offenses) must remain illegal 
>because it damages or is a threat to the world banking and financial system 
>(not just the tax take of governments), but I have yet to see any 
>explanation of how and why.  Anyone care to comment?

Might be a bit of a stretch, but I think this is because money today is 
inherently a liability, that is a debt that someone, somewhere has promised 
to pay back.  Such is the nature of fractional reserve banking and 
debt-based currencies under which the international financial system 
functions.

Thus if the origin of the money (the indebted party) is obscured, it becomes 
increasingly difficult to manage the quality of the world's money supply.  
After all, how can the issuer of the money collect on the debt that 
ultimately backs it when the issuer has no idea who to collect the debt 
from?  Take away the ability to manage debt effectively and the issuer's 
money quickly becomes worthless (be it a commercial bank issuing deposit 
currency as a loan to its customers or a government's central bank issuing 
cash currency to its citizens based on a debt placed upon future generations 
of citizens).

A money's value is measured by the quality of debt backing it.  If the debt 
is defaulted on (whether through obscurity, Chapter 11, etcetera), the money 
loses value, which in turn can have negative systemic repercussions 
throughout the world's financial markets.  The recent Asian currency 
devaluations (South Korea in particular) and the accompanying financial woes 
are a good example of what happens when the debt quality of money devalues.

Nerthus

- -----BEGIN PGP PUBLIC KEY BLOCK-----
Version: PGP for Personal Privacy 5.0
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=aekz
- -----END PGP PUBLIC KEY BLOCK-----

-----BEGIN PGP SIGNATURE-----
Version: PGP for Personal Privacy 5.0
Charset: noconv

iQA/AwUBNIiUkxa1d3zm4nqOEQLaYQCcDRU9qkloaPTshE3coevIIdDxlXQAnjVx
fcCqzFIilN8K6KLj346uJkCP
=0xDo
-----END PGP SIGNATURE-----

>>Almost every mainstream news article and regulatory report repeats 
>>the littany that Money Laundering, that is the movement of money to disguise 
>>it origin (even if there are no predicate offenses) must remain illegal 
>>because it damages or is a threat to the world banking and financial system 
>>(not just the tax take of governments), but I have yet to see any 
>>explanation of how and why.  Anyone care to comment?

Because the major news services are Politically Correct,
not in the anti-humorless-leftist sense but in the sense of
generally supporting what the Political Class wants them to,
and generally believing what they're told to believe,
and they'll often go for the easy story rather than thinking up their own,
especially because it leaves them well-connected for doing future
stories on the Political Class and whatever the Political Class wants.
And the Political Class very badly wants to control Money Laundering
1) They want to control your money.
2) They want to control you.
3) They want you to help them control their opponents, and
	laundered money helps their opponents keep operating
4) Money Laundering lets Politically Incorrect Vegetable dealers
	hide their activities and avoid getting caught,
	and the Political Class gets a lot of power from the
	War On Vegetables.
5) Money Laundering helps people evade and avoid taxes.  Clear enough?
6) The State needs Enemies to justify its power.  This'll do.
7) Following The Money helps them know who's doing what.
				Thanks! 
					Bill
Bill Stewart, stewarts@ix.netcom.com
Regular Key PGP Fingerprint D454 E202 CBC8 40BF  3C85 B884 0ABE 4639

At 3:43 PM -0800 12/7/1997, Mix wrote:
>-----BEGIN PGP SIGNED MESSAGE-----
>Hash: SHA1
>
>Steve Schear wrote:
>>This topic, of course, is near the top of many libertarian e-commerce 
>>agendas.  Almost every mainstream news article and regulatory report repeats 
>>the littany that Money Laundering, that is the movement of money to disguise 
>>it origin (even if there are no predicate offenses) must remain illegal 
>>because it damages or is a threat to the world banking and financial system 
>>(not just the tax take of governments), but I have yet to see any 
>>explanation of how and why.  Anyone care to comment?
>
>Might be a bit of a stretch, but I think this is because money today is 
>inherently a liability, that is a debt that someone, somewhere has promised 
>to pay back.

You've got this all backwards.  The bearer certificates (paper money) issued by governments is an interest-free loan by those holding the paper to the issuer.
 
>A money's value is measured by the quality of debt backing it.  If the debt 
>is defaulted on (whether through obscurity, Chapter 11, etcetera), the money 
>loses value, which in turn can have negative systemic repercussions 
>throughout the world's financial markets.  The recent Asian currency 
>devaluations (South Korea in particular) and the accompanying financial woes 
>are a good example of what happens when the debt quality of money devalues.

Most of this bad debt is from unwise or even illegal speculation.  I propose that it is much more common for those who deal in money from anonymous sources to look to placing that money into mainstream operating businesses and investments than as assests to back fraudulent loans, although this certainly does happen (perhaps some of the bad debt held by Japanese banks to alledged Yakusa might fall in this latter category.

--Steve


PGP mail preferred, see  	http://www.pgp.com and
				http://web.mit.edu/network/pgp.html

RSA fingerprint: FE90 1A95 9DEA 8D61  812E CCA9 A44A FBA9
RSA key: http://keys.pgp.com:11371/pks/lookup?op=index&search=0x55C78B0D
---------------------------------------------------------------------
Steve Schear              | tel: (702) 658-2654
CEO                       | fax: (702) 658-2673
First ECache Corporation  |
7075 West Gowan Road      |
Suite 2148                |
Las Vegas, NV 89129       | Internet: schear@lvdi.net
---------------------------------------------------------------------

	I know not what course others may take; but as for me, 
	give me ECache or give me debt!

	"It's your Cache"