When I was in college I taught flying for Louisiana Tech University and then I moved on to flying corporate aircraft prior to entering the U.S. Air Force. One of the people I flew for owned construction equipment and built roads and bridges for the state of Louisiana.
We would routinely fly to Baton Rouge, the state capital, and bring boxes of peaches to the politician’s offices. My boss was not only handing out peaches.
In return, he would receive inside information on SEALED bids. I’m not kidding, and he was caught and fined for this on at least one occasion that I know of.
Not only did he do that, but he mastered the corporate shell game. What he would do is start a corporation just to bid on a large project. If he won the bid, he would “buy” the equipment from his last corporation, thus he could depreciate the same assets again. Meanwhile, in his old corporation the money received was never enough to pay off his creditors and he would simply bankrupt the company leaving behind debt to those who were unwittingly providing credit to his shell corporation. He did this repeatedly and would move assets around like crazy, even trading road building equipment for the airplane that I flew. Of course Louisiana had dirty money everywhere at the time, including a famously filthy-dirty governor.
So there’s a small personal example of how corporations play the shell game and how they influence politicians. Of course that was peanuts compared to the games being played by the central banks and by their lobbyists. But THE GAME IS THE SAME.
The latest example can be found in Britain…
Britain’s taxpayer-owned banks are selling repossessed property assets to their own subsidiaries to avoid billions of pounds of losses that would be incurred by selling them in the open market.
The practice, which was popular towards the end of the recession of the early 1990s, enables banks to avoid selling assets that have fallen significantly in value and are in negative equity to an outside buyer, which would leave it nursing a loss.
An industry source familiar with the practice said: “This is a legitimate strategy that was pursued at the end of the previous recession. It means that the bank is able to avoid crystallising the loss, although it is still on the balance sheet.
“They will do this with a small proportion of the total outstanding debts. All the banks must do to meet regulations is maintain capital lending.”
Legitimate? Only if you’re an industry insider.
This is simply playing the shell game and it subverts the rule of law. The rule of law states that when your debts exceed your assets, you are bankrupt. Then you proceed to a bankruptcy court where your assets are sold and the creditors are paid in the proper order.
The shell game subverts the rule of law by passing underwater “assets” to a shell corporation leaving the remaining corporation in tact. What this does is hide valuable assets from the people who are creditors on the bad assets.
THIS IS NOT WHAT CORPORATIONS ARE MEANT TO DO. This same game is happening here in the United States as well. Our governments are COMPLICIT in playing this game as are the accounting firms who go along with such schemes.
The rule of law is breaking down. Think about what that means if you are a potential future creditor… it means that you might be left standing naked in the cold, and you would be properly advised to think twice about ever putting your hard earned capital to work in that country again.
Remember Penn & Teller’s explanation of “sleight of hand?” The seven secrets of magic are:
Here they are explaining the shell game by using cups and balls – only need to watch the first 4 minutes:
Okay, now that you’ve seen how the shell game is played and you know the “magic” concepts of “steal” and “ditch,” follow along and see if you can spot the pea. When you see what is going on behind the scenes, it doesn’t seem so “magical” any more, does it?
What do you think is going on with our banks and government???