Tag Archives: Libya

Mubarak and Gaddafi were in it for the money. Tyrants always are.

Just in! Muammar Gaddafi has grown rich on the back of the Libyan people.

The dictator’s dough: Astonishing wealth of Gaddafi and his family revealed

The astonishing wealth of Libyan tyrant Muammar Gaddafi and his family has been laid bare as countries around the world begin freezing billions of dollars worth of their assets.

The U.S. alone has seized $30billion (£18.5bn) of their investments, while Canada has frozen $2.4bn (£1.5bn), Austria, $1.7bn (£1bn) and the UK, $1bn ($600m).

These assets appear to be just the tip of the iceberg, as no one is yet certain exactly what the family owns around the world.

Story continues here…

Previously, we learned the same thing about Hosni Mubarak in Egypt:

Mubarak family fortune could reach $70bn, say experts

President Hosni Mubarak’s family fortune could be as much as $70bn (£43.5bn) according to analysis by Middle East experts, with much of his wealth in British and Swiss banks or tied up in real estate in London, New York, Los Angeles and along expensive tracts of the Red Sea coast.

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But then we learned those estimates were too high. Nevertheless, Mubarak was still quite wealthy.

Hosni Mubarak’s Wealth: He’s a Thief, But Not That Big a Thief

Egypt’s Former President Worth ‘Only’ $5 Billion, Says U.S. Intelligence; Family Wealth Estimates Range Up to $70 Billion

Newly deposed Egyptian President Hosni Mubarak and his family have a fortune of $1 billion to $5 billion stashed in foreign banks, according to U.S. intelligence estimates — a significantly lower figure than most recent estimates of the wealth accumulated by Mubarak during his 30 years in power.

Some experts have estimated that the Mubarak family has a net worth as high as $70 billion, while others have reported $40 billion, but U.S. intelligence sources told ABC News that the real number is probably much lower.

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Surprised? I assume you are not and you shouldn’t be. Aristotle warned us that tyrants are like this:

As of oligarchy so of tyranny, the end is wealth; (for by wealth only can the tyrant maintain either his guard or his luxury). [Aristotle, Politics Book 5 Part 10.]

Another practice of tyrants is to multiply taxes, after the manner of Dionysius at Syracuse, who contrived that within five years his subjects should bring into the treasury their whole property. [Aristotle, Politics Book 5 Part 11.]

Just in case some didn’t believe Aristotle, a quick look at relatively recent history demonstrates the same. (Quotes from my book.)

Regarding the Soviet Union:

Stalin and his cronies, though, did not share in the people’s suffering. In fact, Stalin and other leading Communists lived in houses that had belonged to Russia’s wealthiest families before the revolution.

And in Nazi Germany:

As in all tyrannies, many of the Nazi leaders used their power to amass vast wealth. Hermann Goering used his power as commander of the Luftwaffe, administrator of the Four Year Plan, and Hitler’s designated successor to acquire mansions and create an enormous industrial enterprise called Hermann Goering Works. As Reichsminister of Propaganda, Joseph Goebbels received gifts from the media, including a house given to him by the film industry. He also used his power to seduce several female film stars.

Sovereign debt implications of Middle East turmoil

Disregarding the discussion about the political effects of the protests in the Middle East, how about the financial implications?

The cost of protecting sovereign debt against non-payment in northern Africa and the Middle East continued to rise Tuesday as investors reacted to ongoing turmoil in Libya. Morocco was hardest hit, with the spread on five-year credit default swaps widening to 200 basis points from around 184 on Monday, according to data provider Markit. That means it would cost $200,000 annually to insure $10 million of Moroccan debt against default for five years, up from $184,000. The Egyptian CDS spread widened 19 basis points to 375, Markit said, while Bahrain’s spread widened 10 basis points to 317. The Israel CDS spread widened to 163 from 154.

Losses by banks in this region will only hurt the important countries’ fiscal situation.

Looking at Portugal, now the key country, interest rate are new highs.

The turmoil in the Middle East just adds a new twist to the sovereign debt crisis. Until nations reduce their debt levels, which none are doing right now, this story is far from over and will be around for years to come.