The forces of economic degradation have been busy in the United States for several decades now. The US has been losing its industrial base since the 1960s. Manufacturers are moving their plants overseas in order to maximize their profits.
The real economy (with the exception of the military-industrial complex) is in a pitiful state. Nevertheless, the US continues to be considered an economically developed country. In addition, the American standard of living, as measured by the average statistical indices (GDP per capita), still puts the country in the top ten.
But this is no paradox. The US is simply a parasite state. America’s parasitic existence is maintained through an influx of capital from every corner of the globe. First of all, the US is the beneficiary of credit in the form of the enormous dollar reserves stockpiled by other countries. These are actually stockpiles of promissory notes purchased from the US Federal Reserve System and Treasury. Second, large quantities of private capital flow into the US, which is invested in real estate and shares of American corporations and banks, and the same can be said for monetary capital that is deposited into accounts at US depository and lending institutions.
The secret behind what might be called Federal Reserve System«appeal to investors» is that the world’s most important printing press is located in Washington and is owned by the US Federal Reserve System. The output of the Fed’s printing press (dollars) are not backed by gold, state assets, or even by the products of what few manufacturing industries still remain in the US. Dollars are only backed by the military might that is represented by the US service bases found all over the world, the US Sixth Fleet, its submarines with nuclear warheads, and also the bombers, nuclear missiles, etc. that are based in the US itself. This military backing of US currency is reinforced by propaganda support from mass media controlled by the US Federal Reserve’s shareholders.
However, there is another secret to the US «economic miracle». And that is the offshore side of the US economy. This American idiosyncrasy has long kept to the shadows and little has been written or spoken of it. Only during the recent scandal over the «Panama Papers» have some facts finally come to light exposing the role and place of the US in the world’s offshore industry.
Everyone was surprised at the very small number of US citizens listed in the in the «Panama Papers». The first explanation offered was that since the US State Department and CIA were behind the leaked documents, the compromising materials were carefully screened for inclusion so as not to irk any VIP American owners or beneficiaries of offshore companies and accounts. Then a different story was put forward: there are so few Americans on the list of that Panamanian company because they are not interested in Panama as an offshore destination. They have created an «offshore paradise» right there at home.
And then some interesting facts and figures emerged. Some of them came from the NGO Tax Justice Network (TJN), which has investigated the use of offshore businesses for tax evasion for many years. TJN has compiled a ranking of the attractiveness of tax havens. The US was awarded third place in the 2015 ranking. But Panama, the epicenter of the scandal, only came in 13th on that list. It seems that for foreign oligarchs and kleptomaniac bureaucrats, America is a more convenient tax haven than, for example, the infamous jurisdictions of Cayman Islands and Singapore.
What need have US banks and corporations of Switzerland, Hong Kong, the British Virgin Islands, or Panama, if they have their own domestic offshore sanctuary in Delaware? That state has long provided its American clients with all the needed «accommodations»: lenient tax laws, total confidentiality, and quick turnaround. Officials in Delaware have even promised that the FBI, IRS, Justice Dept. and other US government agencies responsible for the US Treasury and national security will not be allowed to pry into their clients’ secrets. They are their own «state within a state»!
Delaware proudly calls itself America’s incorporation capital, with over one million commercial entities registered there. More than 50% of all publicly traded companies in the US are legally based in Delaware. Delaware is the legal home to 64% of all companies in the Fortune 500 list. South Dakota, Wyoming, and Nevada are the next most popular «offshore» shelters, followed by Texas, Oregon, and Florida. Different sources list between 20 and 30 US domestic offshore destinations: several states, cities, and municipalities with special regulations. In a certain sense even New York is an offshore sanctuary, with its flourishing trade in high-end real estate. And until recently those clients and ultimate beneficiaries were guaranteed full confidentiality. However, the US government has now begun to investigate luxury real-estate deals in Manhattan in order to identify the actual beneficiaries.
And even during the current scandal over the «Panama Papers», during which published articles have exposed the US role as an offshore jurisdiction, one important issue has not been addressed. To be specific, there has not been one word about what are known as charitable and philanthropic foundations. In fact, American oligarchs are steering their capital into these types of off-shore entities so as to avoid or minimize their own tax burden. The assets of these foundations are generated through the purchase of various types of securities. Charitable foundations are active players in the financial markets. Because these foundations’ assets enjoy tax immunity, the treasury is losing far more from them than from the offshore registration of certain American companies, for example. Meanwhile, no one in America dares impugn the privileged status of charitable foundations – in the US this topic is even more taboo than the subject of the US Federal Reserve.
But returning to the offshore scandals of recent years, we know who needs these scandals, and why. They are needed by the money masters who want to turn America into a global offshore haven. Some of the world’s offshore shelters have already been destroyed, but three to five dozen still remain. Washington is using leaks and scandals to «steer the wave» (of offshore assets) toward America. Each scandal results in the destruction of one or more offshore sanctuaries. For example, the British Virgin Islands was dealt a heavy blow in 2013. The offshore residents of that jurisdiction rushed to take shelter under the wing of the US. In Nevada the Rothschilds even opened an office to register outcasts from the British Virgin Islands in America.
It’s interesting that Washington is using its stooge – the European Union – to forcefully goad Europeans into combating offshore schemes. And thus, under Washington’s influence the European Union has adopted a Savings Directive (EUSD) on the taxation of savings income. Its goal is to stop the public from hiding money from the tax authorities. The directive has truly made it quite difficult for Europeans to shelter their money from taxation inside Europe. In essence, banks in EU countries are required to deduct any unpaid taxes from the bank accounts of citizens of other European countries. After the directive was introduced, there was a dramatic increase in the number of people wanting to open a bank account outside of Europe, particularly in Panama and the British Virgin Islands. Thus Europeans were lured out of their own continent and then forced to flee to America.
In 2010, Washington adopted the extraterritorial FATCA law, requiring all countries in the world to provide US tax authorities with information about the accounts of American taxpayers. This law has already taken effect and information is flooding into Washington from every corner of the globe. At the same time, Washington has been prodding the Organization for Economic Cooperation and Development (OECD) to develop a Common Reporting Standard (CRS) for the exchange of tax information. That standard has now been developed, approved, and added to the arsenal of not only the OECD member states, but also many other countries (almost 100 of them). But here’s a surprising fact: two or three exotic jurisdictions have now decided not to adopt the standard, in addition to ... the US.
As Christian Kalin, the chairman of Henley & Partners advisory firm, claims, «The US is a black hole of information for other countries now. Financial information goes in to the US, but does not come out». Is this not proof that the money masters are planning to make the US the world’s only offshore destination? Because of Washington’s refusal to adopt the CRS, the Bloomberg has reported that the US could soon become the biggest tax haven in the world, as the assets of wealthy people from Europe and other countries are being transferred there by asset management companies. But far from everyone in the US wants to see their country turned into a depository for dirty money. Stefanie Ostfeld, the acting head of the US office of the anti-corruption group Global Witness, stated bitterly, «What’s lesser known, is the US is just as big a secrecy jurisdiction as so many of these Caribbean countries and Panama. We should not want to be the playground for the world’s dirty money, which is what we are right now».