Sunday, May 22, 2011

Libya Turmoil 142

Libya’s money

In Tripoli the “journalists” of ABC asked me how long Gaddafi could last financially?
I answered them much longer than the US.
They couldn’t believe me and continued: ”no seriously, how many months can he last?”
My answer, 10/20 years, brought a very big surprised expression on their faces: “NO, impossible”.
Our society of money changers and bean counters is not able anymore to think about a solid society, not based on debt or credit.
Libya has known an embargo for decades and a real ostracism for 42 years.
Gaddafi was never understood nor accepted. He was declared crazy and loony from the very beginning because he didn’t accept the orders from his “betters”. His feeling of oppression by the Western powers that be and afterwards his betrayal by the Soviets convinced him to look for an alternative solution, based on their native tribal structure.
He didn’t spend money because he couldn’t, the embargo obliged him to save money.
This frugal lifestyle wasn’t really bad for the country, they learned to live with it.
Only the Western educated and latter “revolutionaries” wanted more pieces of the cake.
I have seen governors of provinces, with budgets of billions, walking around in old army fatigues and plastic sandals, driving in old Toyota Corolla’s, with absolutely no desire for more luxury.
Gaddafi himself is of the same ilk, money doesn’t drive him, the fate of his country is his only driving force.
If that is enough to consider him a lunatic than he will proudly declare himself a lunatic.
As far as the money of the country is concerned, the calculation is rapidly made.
The total revenue during 42 years went far over a trillion dollars.
During the embargo time Libya spent only the interest of its investments, they didn’t touch their capital.
They had some amounts in foreign, US, European and Arab countries and banks.
That money was continuously siphoned off by those banks, they didn’t receive any interest on their money, the paid expenses every year on that money, pure highway robbery.
Gaddafi is a very astute investor and made several very good investments worldwide, which saved Libya a lot of money and kept their capital intact.
Today Libya is still sitting on a cash hoard of far over one trillion, the second largest after China, but safer. China has too much worthless US paper.
Because of his cash position, Libya was thinking to make Africans benefit of their commodities by introducing their own gold backed currency and their own Reserve Fund.
This would have shown the decrepit situation of the world credit system and the real abysmal situation of the Western banks.
Because the emperor had no clothes anymore Gaddafi had to disappear.
Russia and China are still hesitating what to do and whom to join. The sirene songs of Wall Street are very seductive but extremely empty. The main US corporations are already voting with their feet to Asia, just in case.
I hope Gaddafi survives the criminal onslaught and will have the chance to see his enemies crumble. The stakes are extremely high.


  1. very interesting piece...This side of Gadaffi and Libya is not well known.

  2. That's more money than I thought. I thought the $60 billion plus frozen worldwide was a huge portion of their available funds - looks like that thievery is significant but not make-or-break. Just enough to start a process the NATO bloc will be loathe to stop, not enough to make it automatic. Awkward.

    Hermes, this phrase could use some explanation:
    voting with their feet to Asia, just in case

  3. That is one of the reasons I admire Gaddafi. He is one of the only politicians with integrity. He is a true Bedouin, you cannot corrupt him with money. All his actions have always been for honorable causes. I wish more people could see that. Have you seen part of the ABC interview in Tripoli that was conveniently edidted out where he states "I don't like money"?

  4. @ Caustic Logic

    The high technology sector is absolutely not obliged to have theirproducts manufactured in Asia, but still they all do.
    Their profit margins are more than comfortable to be able to produce in the US.
    But they are moving all production facilities to Asia.
    Why? Taxes, labor laws and freedom of currency, meaning they can work with any currency in the world without strict controls. That's impossible in the US. Any substantial payment from the US to outside suplliers of raw materials and such is scrutinzed and vetted.
    The US has now a currency control system which has no other country in the world. I have personal experiences and all my friends have the same experiences.
    The Fed wants to know where every US dollar is and why.
    Of course with their level of debt they can go under at any time through pooling of their debt, China could even do it alone, but it's not in their interest.
    The major corporations don't want to run that risk and are spreading the risk but moving their production abroad.

  5. @ Stephanie

    Thanks, I didn't know they edited this.
    Christiane should know better.
    Anyway what Gaddafi says here is the absolute truth, he has no connection to money and he has no bank accounts anywhere.

  6. I realized something fishy was going on because when they froze "Gaddafi's bank accounts" in the UK, I got emails from Libyan friends currently studying in the UK who had no access to their monthly compensation. This was enough proof for me, proof that it was not Gaddafi's money but the money of all Libyans.

  7. thanks for the enlightening info. Its now spread around facebook

  8. @ Stephanie

    Every year Libya sent their best students to universities abroad, all expenses paid.
    The UK received this way 90 million Pound Sterling per year via the Embassy of Libya, in tuition fees and living expenses.
    This is frozen now.
    I don't even speak about the hospitals where Libyans were treated, all expenses paid by the Libyan State.

  9. When Gaddafi was last in New York at the UN, he had a visit from the secretary of the US treasury, Geithner, who proposed him an interest rate of 10 % per year with every guarantee in the book.
    Gaddafi told his inner circle: we will give them something, the 32 billion you hear about today, but the US will immediately steal it.
    That's Gaddafi.

  10. @Hermes...Same thing happened when they froze Iran's accounts in '79 (I think). The Iranians never saw that money again. 40Billion is almost equivalent to the entire fortune of Bill Gates. Legal thieves! On another topic:how do you think Libya is going to deal with the apache helicopters that arrived in Libya yesterday? These monsters destroy everything in sight and are hard to shoot down.

  11. Then why the revolutuion?

  12. @anonymous ... 'then why the revolution?"

    - the revolution was started by the US, with fake twiter accounts.. manipulating social media.. it's proven. the west aided and armed Islamic fundamentalists to make violent riots and to attack and arm depot in Libya.. Why the west did it? money, oil, setting up a private central bank in Benghazi a couple of days after an 'uprising', gold, diamonds, to deny those resources to China and Russia, who were in good terms with Gadaffi, to destroy African Union, and gold currency..

  13. anon said:
    "- the revolution was started by the US, with fake twiter accounts.. manipulating social media.. it's proven."

    Really? It's proven?