Now that a variety of factions have harvested the planet for trillions of dollars in the latest round of financial pump and dumps, the questions remains how to launder the money into real assets quickly.

The first big asset that is the target of such efforts is inevitably land and real estate. How to get huge positions in land and real estate that can be developed quickly?

Disaster capitalism is so profitable. You buy the land cheap and then someone else pays for your improvements while you get to keep the equity capital gains. Given how much money is sitting in offshore havens, however, there are not enough hurricanes, tsunamis and earthquakes to tee up sufficient opportunities fast enough.

So how do we come up with a way that buys up places, launders big money fast and generates a new round of construction contracts while maintaining the socially attractive brand we need to add in government redevelopment deals and stick the cost to the local citizenry?

In situations like this, the first thing that happens is a round of creative conversations by “admired” academics and think tanks looking to attract lots of people who are eager to transform our situation.

Think I am being harsh? Check out a recent description of Paul Rommer “new idea:”

“He [Paul Romer] proposed that developing countries could invite experienced governments such as Finland… to have administrative (and perhaps democratic control from afar) to create new instant cities for 10 million people. As Stewart Brand wrote about Romer’s talk “They would enrich the country where they are built as special economic zones while also rewarding the distant government that makes the investment of building the new city state and installing a set of fair and productive rules. Over time, as with Hong Kong, the new city is turned over to the host country.”

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As Bill King says, “you just could not make this stuff up.”

12 Comments

  2. Some miscellaneous data regarding construction and investment interests in the general vicinity…

    Stanford is located outside of San Francisco.

    I. From Wiki – Stanford University

    Stanford was the top fund-raising university in the United States for the fiscal year ending June 30, 2008 with $785 million.[54]

    The endowment, managed by the Stanford Management Company, was valued at $17.2 billion in 2008 and had achieved an annualized rate of return of 15.1% since 1998.[28][55] In the economic downturn of January 2009, however, the endowment has dropped 20 to 30 percent.[56] According to the San Francisco Chronicle, “Stanford’s endowment has lost approximately $4 billion to $5 billion, or 20 to 30 percent of its value,” since 2008. As a result, all campus units are cutting their budgets by 15 percent in 2009.[57]

    2. From Wiki – Bechtel

    Bechtel Corporation (Bechtel Group) is the largest engineering company in the United States, ranking as the 7th-largest privately owned company in the U.S. With headquarters in San Francisco, Bechtel had 42,500 employees as of 2009 working on projects in nearly 50 countries with $31.4 billion in revenue.

    http://en.wikipedia.org/wiki/Bechtel

    3. From Wiki – George Schultz

    George Pratt Shultz (born December 13, 1920) is an American economist, statesman, and businessman. He served as the United States Secretary of Labor from 1969 to 1970, as the U.S. Secretary of the Treasury from 1972 to 1974, and as the U.S. Secretary of State from 1982 to 1989. Before entering politics, he was professor of economics at MIT and the University of Chicago, serving as Dean of the University of Chicago Graduate School of Business from 1962 to 1969. Between 1974 and 1982, Shultz was an executive at Bechtel, eventually becoming the firm’s president. He is currently a distinguished fellow at Stanford University’s Hoover Institution.

    http://en.wikipedia.org/wiki/George_Schultz

    4. University of Chicago

    Romer earned a B.S. in physics in 1977 and a Ph.D. in economics in 1983, both from the University of Chicago.

    Naomi Klein has done a very thorough job of documenting the use of University of Chicago economists in justifying highly profitable economic warfare:

    http://en.wikipedia.org/wiki/Naomi_Klein
    http://www.thenation.com/doc/20080630/klein
    http://en.wikipedia.org/wiki/The_Shock_Doctrine

  3. They might create a wave of tax sales by creating conditions in which few can pay their property taxes. But I’d expect that to be a move used later in the game, after hyperinflation. If food prices are impossibly high due to hyperinflation and speculation, people could be forced to spend all their paper money just to eat.

    Building those cities makes a lot of sense. It gives a great deal of control, and negates many issues of resistance/opposition. As long they perceive it is happening “somewhere else” to “someone else” people tend to roll over. It sounds like a rehashing of the Export Processing Zone concept. A pretense of special circumstances justifying a legal no-man’s land. We’ve all seen how well EPZs went over as a means of textile production. I wonder if they’d build them as permanent cities designed to control people, or to temporarily hold value until being sold to sucker money.

  4. As sad as it is to admit, I’m not at all surprised by the notion that this is a likely outcome. I’m reminded of what John Perkins said in his “Confessions of an Economic Hit Man”. He described how as a highly paid professional, he helped the U.S. cheat poor countries around the globe out of trillions of dollars by lending them more money than they could possibly repay and then take over their economies and, their natural resources.

  6. Catherine,

    Sorry for not being able to give the credit for this.. When I heard it, you immediately came to mind.

    “Do not be misguided by the ideas or thoughts of others unless what they say or do rings true in your heart.

    There are many false prophets.

    True leaders do not tell anybody they are in charge.

    True leaders will have people follow them whether they like it or not.

    True leaders transcend human relationships through their integrity, character and their respect for others. In this humbleness they bring forth the light of God in everything they do and from this spiritual basis, they will find more support than they ever thought possible.”

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