How to launder money

The best way to launder money obliviously is to keep it clean in the first place!

"But I'm sitting on this huge pile of stinking money!" – you tell me. Well, then you have a job to do!

My first advice for you is to go find yourself someone else with that problem too. You could swap money so to speak! His money stinks and so does yours but the funny thing with money is that once they change owner all the dirt and sweat (and blood?) rubs off all at once! Lend the other guy your money and in return they could lend you theirs! Set up an i-owe-you in a single sentence:

I, John Doe, owe you, Jane Doe, US$ 200,000 which I promise to repay you in exactly 1 year with US$ 200,000.

No interest hence no tax - just the principal.

As long as you "swap" equal amounts of money it's like you didn't at all and it's like they did not exist in the first place.

You could allow friends to join and widen the scope so to speak. Eventually they would start referring to your 'band-of-brothers' as a bank – in fact that's what actually happened. Some guy would lend someone else their money and have it paid back later!

Disclaimer! It's probably the worst idea in the history of money laundering schemes – don't go that way; I shared it only to prove the point: money don't stink!

Nationalize money -or?

At the moment Danish TV2 is streaming Den sorte svane (The Black Swan) a limited series documenting how relatively easy it is for criminals to avoid tax, VAT, and laundering of money.

Meanwhile in Folketinget (the Danish Parliament) politicians are debating (I'm joking - they are not! They are debating their own mishaps on Instagram! But they should...) what to do about the growing number of 'cold hands' in the public administration - some 100,000 with 13% being new hires since 2016 (the total number of employees in public service is a mind blowing 750,000+, mind you). With pricey new IT systems to support the tax and VAT administration it has been necessary, allegedly, to hire an extra 2,000 pair of hands in this department alone! Speaking of tax and VAT; fighting crafty business men exploiting the Danish Tax Code also takes a hefty toll on public finances.

In a previous post I mentioned the banks having their field day with off the charts returns due to surcharges and rising interest rates. Credit card companies hate to be left alone at the station so they try to keep up on the price hike offering small business owners no easy way out when wanting to provide easy ways for customers to pay for goods in their stores, with price increases on payment processing in the double digits.

Let's for a very brief moment pause on that last sentence! A payment processing when all curtains and mirrors are pulled back goes more or less like this:

C1: hallo C2!
C2: hi there C1!
C1: can I have you put 20$ into account #1234?
C2: sure! Consider it done!
C1: great! I owe you 20 bucks!
C2: sure do! Noted!
C1: thx - have a nice day!
C2: U2!

It's obviously the "happy path" and all sorts of mishap may clutter the process but that's worth another story! Bottom line is that the payment processing is nothing more than 2 computers agreeing on submitting vis-a-vis receiving a number (a currency amount) and – for the receiving computer – an account identification. Optimized it's less than 10 Internet packets, an infinitely small cost added to perhaps 50 CPU cycles, an even smaller cost. A total of less than 1 cent (even if we include depreciation on the hardware and software included, energy, and man-power to keep the darn things running. Just so that you know what we are in fact talking about!

One way out would be to ask the Nationalbanken (The Danish National Bank) to setup shop and start running a cheap payment processing service - and lending money at fair rates - but there is not much evidence to support the public sector being good at running businesses!

The only way Nationalbanken could do a better job would be if it were to do a different job!

Learn of what job that could be in the next part.