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Squillions: How money laundering won

lrb.co.uk

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Re: Squillions: How money laundering won

#171

Post by applicative »

The writer argues that since $100 bills aren't much used in daily commerce, the 80% of circulating paper money in $100s must be used for crime. But it is obviously predominantly hoards. I know US $ are hoarded all across Latin America, and assume it is so elsewhere. Even in USA keeping them somewhere secure is a sort of hedge against banking collapse, if not against 'collapse of the dollar'. It is like gold or anything else.

No apriori principle can tell you what the ratio of 'genuinely circulating' to hoarded money should be. When money was gold or silver, as Bagehot says, the hoards in e.g. France were huge, but those in Scotland, where there was enthusiasm for the banks, were tiny.

Re: Squillions: How money laundering won

#172

Post by air7 »

AnthonyMouse wrote: post #162
alberth wrote: post #135

> I haven’t even mentioned gold, which is used all the time in criminal transactions, let alone cryptocurrency, the single biggest recent innovation in money laundering . Curious how that line is received within the HN crowd.

It seems pretty obvious that cryptocurrency can be used to transfer funds. The question is whether this is actually an innovation or just method #373453 of doing the thing that was always possible a million other ways. Suppose someone has a million dollars in cash and wants to turn it into "clean" money in a bank account, or transfer it to another country. They pick any goods with a high cost to weight ratio and a th…

I don't get it.

The IRS sees a clean million dollars in your bank account. They ask "how did you get that?" You answer "Oh I just sold this super expensive thing on a marketplace". Then they ask "Ok, but how did you get/buy this expensive thing?" What do you say?

Re: Squillions: How money laundering won

#173

Post by mercutio2 »

SkiFire13 wrote: post #151
UltraSane wrote: post #117

Earlier quoted context omitted.

I use a credit card that I pay off in full every month and I get 2% cash back paid for by interest other users pay.

Most of your cash back money actually comes from fees that merchants pay. In the US and especially for credit cards with cash back those fees can be quite high, and unfortunately it's illegal for merchants to discriminate against credit cards with high fees.

This used to be true. But the 2025 Interchange Fee Settlement abolished the “Honor All Cards” regime. Perhaps, I know it’s crazy, but… perhaps segmenting the market into extremely high-spending customers, normal pay-every-month-relatively-low-fees, and no-frills, was a smart move by the big issuers? My sense is that alienating big spenders (whose interchange fees tend to be in the 4% range) is just not worth it?

All I can say for sure is no store I’ve ever encountered has operationalized the newfound ability to differentially reject some cards yet. I am starting to see grittier establishments offer 5% cash discounts more frequently than they used to, and I’m always happy to pay cash when they do.

But when there’s no discount, why would I forgo better accounting and 3-5% back in points?

Re: Squillions: How money laundering won

#174

Post by mercutio2 »

AnthonyMouse wrote: post #144
satvikpendem wrote: post #140

Earlier quoted context omitted.

No, the merchant pays, although recently more and more have been handing off the 3% to the consumer by giving a lower cash price. But well, most people don't have cash so that's essentially a convenience fee.

The credit card companies tell you that the merchant pays. Cost incidence doesn't work like that. If every seller in a fungible commodity market has the same additional cost, the price is going up by that amount.

Yes, but you’re perhaps missing OP’s point?

Incidence is very much on customers, but (high interchange fee) credit card users are getting a rebate of most, if not all, of that. It’s the cash users who AREN’T getting a rebate, and thus the incidence is on them (and people using other low-or-zero cashback payment methods).

Re: Squillions: How money laundering won

#175

Post by userulluipeste »

pjc50 wrote: post #74
mike_hearn wrote: post #66

I learned a lot about the AML system many years ago and still have some books about how it works on my bookshelf. It's fascinating stuff. A few minor comments. My wife and I have owned and used 1000 CHF notes quite a few times in the past. The last two times we moved apartments I paid part of the moving fee with a 1000 CHF note. We've also bought furniture this way. Nobody was surprised to see this and the notes were…

> You can't get any high value notes there, they just don't exist Yes, although this is mostly by capping the highest regularly circulating note at £50 after the war and then waiting for inflation. > And there's so much street crime, [mostly false] > and the police care so little about burglary, Sadly true (including "find my iPhone" reports; there was a joke during the Mandelson scandal that this was the one time th…

"I don't understand why the EU loves VAT so much."

Because it's easy money as taxation goes. Facing growing fiscal deficit and worsening credit score, the first thing the government in Romania did last summer was to rise the (general) VAT quota and cut on some VAT exceptions. It works quicker and more reliably than other means for securing the budget needs.

The VAT related fraudulent schemes are a problem in EU as many other things are, but they are investigated, often prosecuted, and written about. For anyone interested, more can be found at the European Public Prosecutor's Office's site: https://www.eppo.europa.eu/en/media/news

Re: Squillions: How money laundering won

#177

Post by CPLX »

AnthonyMouse wrote: post #146
satvikpendem wrote: post #143

Earlier quoted context omitted.

Depends on your points usage, airline points can be much more valuable than the 3% fee.

Airlines also sell "points" for cash and you can get them for essentially the same cost as the credit card companies do. They're just using the 2% cash back to buy them for you, so even if you want flights, getting a 3%+ discount and using the money to buy points puts you ahead. It also lets you time your purchase (there are sometimes temporary "deals" on points), collect interest on the cash until you exchange it fo…

That's not really true on a practical level. For the most part, you can't just buy airline points at the one to two cent price that you effectively get them for in credit card transactions or the even lower price that the credit card companies themselves are likely paying.

Re: Squillions: How money laundering won

#178

Post by alberth »

air7 wrote: post #172
AnthonyMouse wrote: post #162

Earlier quoted context omitted.

It seems pretty obvious that cryptocurrency can be used to transfer funds. The question is whether this is actually an innovation or just method #373453 of doing the thing that was always possible a million other ways. Suppose someone has a million dollars in cash and wants to turn it into "clean" money in a bank account, or transfer it to another country. They pick any goods with a high cost to weight ratio and a th…

I don't get it. The IRS sees a clean million dollars in your bank account. They ask "how did you get that?" You answer "Oh I just sold this super expensive thing on a marketplace". Then they ask "Ok, but how did you get/buy this expensive thing?" What do you say?

That super expensive thing could be an NFT you created & sold.

Re: Squillions: How money laundering won

#179

Post by Qem »

buran77 wrote: post #107
humoctopus wrote: post #94

Earlier quoted context omitted.

My business needs to insure cash that we keep at the shop in case we get robbed, but that amount is much much less than we pay in credit card fees. In other words, we would much prefer customers to pay with debit or cash.

What about the extra costs of handling cash, the practical effort to count it, prepare it for transport (including bags, counters, and so on), transporting to the bank, increased security, possibly more cash registers, counterfeit detectors etc.? Overall is it usually more expensive to take credit cards than cash or just in particular cases?

At least these are mostly local jobs.

Re: Squillions: How money laundering won

#180

Post by senderista »

Matl wrote: post #158
Anonyneko wrote: post #153

Earlier quoted context omitted.

Considering my country of origin is using crypto for sanction busting at an enormous scale, I just take this line as absolute truth.

Sanction busting is an interesting thing because states are sovereign so if one state imposes sanctions on another, it's not illegal for the sanctioned state to do everything to ignore/bypass them, unless we consider the sanctioning state to be somehow above others/source of truth for what's legal.

Aka the USA
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