An Open Letter to Corrupt Politicians and Business Crooks


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By Philip Mudartha, Doha
Bellevision Media Network

26 Mar 2013

 

How shall I address you? My dear minister, MP, MLA, MLC, corporator, corporate honcho, tycoon, smuggler, black-marketer, goonda and tax fraudster? Choice is yours, Excellency.

 

Elections are round the corner in Karnataka. India will vote soon too

 

The government in Delhi is on ventilator for a long time. Scams after scams have sapped its energy for years. Corruption is talk of the town. A silly mango man is on fast in Delhi and refuses to pay electricity and water bills. He says he belongs to AAM party. He threatens to bring down corruption. I don’t know if our people will vote his party to power, because like you, Your Excellency, we are all corrupt. No exceptions, we have all paid bribes. In return you have allowed us to break the laws that you and our retired masters from London had given us. Businessmen and industrialists, Tata, Birla, Ambani, Mittal, included have benefitted the most with your blessings, not to mention Dawood Ibrahim and his types.

 

 

Whoever collects the bribe, it is no surprise politicians take money that is not theirs

 

What to do with this money? Because your wives and mistresses cannot wear their gold and diamond jewelry, it is too unsafe. Your children cannot spend it on US education, because they do not pass TOEFL, SAT, GMAT and GRE tests. So, you have a problem in laundering your black money.

 

In good old days, kings and queens used to make wars and spend the wealth in killing enemies and friends alike. They used to build temples and mosques, demolish them and build again when power changed hands. Surplus was given to God for safekeeping in temple vaults and often protected by snakes.

 

Times changed. Some two hundred years ago, banks took over their job

 

Not all banks; only foreign banks who ask no questions. No name, only a number. Source of funds is not required to declare. Completing application forms, signature verification, and photo? What is that? It is easy, simple, and above all, secret. As easy as dying; this moment you are there and next, no.

 

 

Some island nations and Swiss decided to make an art of this secret business

 

Pundits have told you Switzerland has financial stability because it is conservative. The Swiss banks are a safe haven unlike our own and those like ours in the uncertain banking world. You have believed them more than God and Gold.

 

But you are in for a rude shock, Excellency. There is breaking news for you

 

The Swiss banks can go bankrupt. Unbelievable, you say? Your money is in Swiss Bank Bonds and their debt/gold/equity/property Funds. These are their assets, while your deposits are their debts. They earn income from assets, pay their costs, earn profits and credit interest to you from net profits. Now consider that these assets earn incomes less than the costs? Or assets disappear? Or depreciate in value? And you come to know and everyone in the world, politicians and business crooks make a run for your money and gold? What if the banks don’t have enough cash and physical gold to settle? They will ask for bankruptcy and government bailout. What if the Swiss government has no resources?

 

 

This is scaremongering by a lunatic; it is not going to happen, you say?

 

Consider this:

 

  • A Pope abdicated last month. Did any pundit give a clue? Popes have always died in office since medieval times in thirteenth century.

 

  • Cyprus joined the honor of sovereign insolvency last week. Its banks have asked for government bail-out. The government has no power to print money because it is in Eurozone. It is begging European Union for funds. The Germans and French, the rich fat cats in EU are fed up giving money to their poor, lazy, spending more than they earn southern cousins. The global rating agencies declared Cypriot Bonds as JUNK. Your Excellency, it is possible your Swiss Bank owns Cypriot Bank Assets? Which are junk?

 

  • Cyprus is not alone. Heard of Iceland, Portugal, Ireland, Italy, Greece and Spain (PIIGS)? Do you remember Iceland Banks failed in September 2008? The foreigners held 50 Billion USD in them. There was no way Icelanders could repay such huge amounts because their GDP was around 9% of it. The government sent the banks into receivership and foreigners are waiting for their money from insurers. They will probably die before claims are decided. Did pundits warn? No, the rating agencies gave A+ only a few days before the catastrophe.

 

  • You are intelligent. You are; otherwise how do you manage to evade taxes, break our laws, manipulate our administrative, legal and justice systems as well as transfer unaccounted money out from the country and run such complex black money market? I will spare details of EU crisis and American Sub-prime crisis. The world financial system nearly collapsed in 2008, right? Your Swiss banks assets certainly consist of PIIGS sovereign debt instruments. Ask them; you will not get answers, because they do not ask you any questions when you give them money. So, you have no right to ask them any questions.

 

Excellency, if you are not scared yet, study the chart below and read further.

 

 

Switzerland has 3rd highest bank assets to GDP ratio, only behind that of Ireland and Iceland! The banks’ assets represent 750% of its GDP. So, when the banks have to write down assets- sovereign debt, real estate loans, securities tied to the US housing market and commodity futures- someone has to bail them out, right?

 

Who? Swiss government, of course! The Swiss government will have to take over bad assets of banks in crisis in order to save them from closure. Who gives it money? It will either have to borrow or print money! What do you think? The 8 million Swiss citizens will sacrifice and suffer to settle 4 trillion plus USD to foreign crooks? Do they suffer from moral guilt when you did not while stealing from your own government and people?

 

The Swiss are clever. They did not join Euro. They can print CHF, the Swiss Francs

 

 

But the Swiss Franc is appreciating. Foreign money is coming in as USD, Euro and JPY. The Swiss banks assets are in foreign currencies and earn income in depreciating currencies while they spend in Swiss Francs to pay wages, rents, utilities and taxes. Bank incomes go down and costs go up. Result? Profits go down. There can be losses too. Do I imagine this to scare you? May be; but I quote:

 

UBS posts 2012 loss of CHF2.51 billion (USD2.70 billion)

 

ZURICH, SWITZERLAND – Switzerland’s largest bank, UBS, finished 2012 with a loss of CHF2.51b, according to company’s financial results, published 5 February, 2013. The bulk of it, CH1.89b, came in the fourth quarter.

 

UBS paid heavy fines totaling $1.5b to US, UK and Swiss authorities for its role in a Libor rate-fixing scam that involved several banks in the three countries. It began a major cost-cutting program in early October 2012 that will see the loss of 10,000 jobs over three years, mainly in investment banking.

 

The Financial Times story on the bank focuses on its decision to reduce financing costs by buying back CHF5b of its own debt. Bloomberg reports that an outflow of CHF4.8b from European clients is behind a significant dip in earnings from wealth management. The outflows followed raids on homes and offices in Germany, and threats by tax authorities in Italy and France aimed at those who might be hiding money in Switzerland.

 

Swiss banks get involved in scams! They are making loss!! Europeans have begun withdrawal. It is not a run; but…

 

 

UBS is a largest among banks. Its assets account for 35% of total held by ten major banks. Today it is UBS, tomorrow? When going gets tough, the pigmies and dinosaurs disappear.

 

Your ill-gotten wealth will disappear too. Give a year or two, Excellency. Bring it back home and invest in building infrastructure, agriculture, industry, banking and insurance, wholesale and retail, and healthcare. Even Udupi, a small town has ambitions of building a monorail. They can use your money.

 

You may not be cured by fear of AAP of Arvind Kejriwal.  What about fear of loss of wealth?

 

 

Philip Mudartha

[..FIRST rank holder of St. Lawrence High School. He not only inscribed his name on the hearts and minds of every Bellean and the neighboring villages, but through out the State of Karnataka as TOPPER of SSLC Board Examinations in the year 1969..]

 

 

 

Comments on this Article
Philip Mudartha, Qatar Sat, March-30-2013, 11:01
To my all readers who left me messages: Yes, what I presented is one facet of an ice-burg named black money. As I have written crooks among politicians, businessmen, professionals and industrialists and generally rich are smarter than rest of us. They have both sharper brains and faster buttons than the law-abiding people. Of course, tax havens are born even as old lose charm. Hot money flies around faster than the speed of light. Those residing in Middle East, where tax rates are very low, and entry of investing is very easy, know it is not only petrodollar surpluses, but foreign money that build and sustain the economies. A week-long trip to Mauritius, one can come face to face with such investors in five star resorts. There are three other facets related, on which I will write my sequels for BV in future.
Shashidhar K, Bangalore Wed, March-27-2013, 1:17
After seeing what happened in last week in Cyprus, Philip s analysis and prediction looks very likely to happen. Good analysis with in depth knowledge of the subject.
Prabhakhar Kamath, Mumbai Tue, March-26-2013, 11:33
Dear Philip, are our politicians and businessmen who have Swiss banks accounts are not aware of European finance crisis ? There are many tax heavens in the world and the money can be shifted easily to other places. I am sure Indian politicians and others who hold such accounts are smart enough to predict doomsday in a dynamic economic world.
Melwyn DSouza, Dubai/ Udupi Tue, March-26-2013, 1:44
Very good article Mr. Philip. I feel it is certain that the Swiss bank are also in danger. History repeats by itself. Let our politicians bring back their unaccounted money and help to build strong Indian economy.
Robert D Costa, Mangalore Tue, March-26-2013, 6:46
A thought-provoking article indeed, that is written with depth of knowledge and volatile situation of tax heavens in Europe. If at all a sensible people's leader reads; he / she will realize that the money and wealth amassed will be like gold hidden in earthen walls by our ancestors that is lost forever since several centuries in India. I look forward to more enlightening articles from Mr Philip!
Valerian Alva, Kattingeri Tue, March-26-2013, 4:32
The need of the hour is to bring back this black money to India. I heard that the total black money in Swiss banks is more than our countries GDP. What needed today is the POLITICAL WILL. But how these same politicians whose money is stacked in Swiss banks and the same politicians who are the root cause of all corruptions will take such bold steps. There is no party in India who can take such a action as all are corrupt. Be it Congress, BJP or any other party, all are same and shameless. Unless the whole political system changes, there is no any hope on this front. But I personally feel we all have a good news. The Aam Aadmi Party headed by Aravind Kejrival is different from others and their actions for the past one year gives us a lot of hopes. Young generation need to support this party so that corruption and black money issues can be controlled to a large extent. Are we ready for change ?
Ronald Sabi, Moodubelle Tue, March-26-2013, 12:55
I read this article in one stroke. Every MP/MLA/ Corporator need to read it. Most of them will not understand it due to their poor IQ and standards. If explained step by step it would take ages. But even several corporaters are good extortionists charging few lakhs on each slab of building(maamul?) in Karnataka! Today Cypus managed last hour bailout! Certainly countries like Greece, Portugal are in bad shape. My good friend Helgi from Iceland owning a Company and travelling worldwide is tour guide today!......Recession Mate!! I wish there comes a method where tax money can not be swindled by politicians in the name of development, religion, minority or reservations, thus small town like Udupi s monorail dream come true!
Joel D sa, Moodubelle,Bahrain Tue, March-26-2013, 12:06
Wow!!! excellent analyzes with good humor, beautifully crafted article and thought provoking. All the world s financial institutions will have tough time in coming years, there is nothing called I am safe, we must plan accordingly and be realistic about our investments. Thank you Mr.Philip for making us realizing the present scenario. Keep writing sir, it s very interesting to read your write-ups.
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