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By Barbara Cerda

Like a Greek play, the inner sanctum of the 1% meme is a melodious and harmonic chorus droning across the globe.  The rhetoric has become common, but that message obscures the realities of actual growth in wealth shadow banking.

By Barbara Cerda

Like a Greek play, the inner sanctum of the 1% meme is a melodic and harmonic chorus droning across the globe.  The rhetoric has become common, but that message obscures the realities of actual growth in wealth shadow banking. 

Shadow banking is expanding beyond the earshot or sight of most media outlets. Benefiting from a tailored obscured white noise that keeps its mechanisms hidden.  However, this monetary river rushes into the hands of ideological extremists worldwide.

Yet unregulated Shadow financials enjoy the same freedoms during monetary transactions in regulated institutions.  

Hawala or Hundi

Regulated global monetary exchanges grow richer while participating in the money laundering of terror donor funds.  They are funded in the billions by sovereign and business leaders. These dollar transactions transect borders. Their ever-greening inner sanctum of wealth creates instant billionaires and has become the driver of the burgeoning bottom lines of government reserves.

This green bubble feeds the economic stream of our lives in every developed nation. It underlines the economic fabric of those of us living in foot-tapping porch homes on Wall Street. Yet few of us know of its existence.

Doing its work as an undercover agent of monetary exchange, the societies of Hawalas are exclusive.  Those actors that serve as a go-between and the gatekeepers are the Hawalers.  In support of the horrors of radical and bloody ideological social reengineering, no federally mandated agency sanctions its money exchanges.  Hawala dealers function within a centuries-old code of ethics that relies on trust between ethnic tribal unions and families.  If recognized as a sovereign nation, its GDP would rank among the highest.

We can enjoy a stimulating debate on whether hawaladars are or have been a needful economic structure because the purchasing power of terrorists and their organizations serves as the underlying structure of major economies.  These funds earmarked for terrorist proliferation hourly navigate their way into regulated sovereign banking.

The “politicization” of Hawala by rich ideologists is rapidly becoming problematic.  So how do you track and punish those who traffic in money laundering? You introduce the regulated offender to the scales of justice.  You punish the participating institution, thereby staunching the flow and minimizing the number of laundering havens (BNP Paribas).  Nevertheless, how often does the politics of the locale, especially in underdeveloped nations, turn a deaf ear; instead, they sanction the religion of Hawala economics.

The role of transnational watchdogging of Hawalas has changed its face and developed strong regulatory muscle. It resembles the Eurasia Group of the Financial Task Force (FATF).

India

Eurasia Group of the Financial Action Task Force (FATF) is being embraced and forming new partnerships in its motivation to drive Pakistani Hawalas from the borders of neighboring countries. Somewhere in the vast and complex dendrites of the Hawala connectivity, someone has discovered that the only pathway to circumventing monetary funds to terrorists’ hands is to clamp off the artery that allows it.

Nevertheless, the realities of a dynamic organism are that it creates what biologists call an anastomosis.  Like a blocked blood vessel, shadow bankers will circumvent an obstructed avenue of exchange and invent a new way to meet hawala’s needs.

Crypto-currency enters from the wings offering yet another popularized avenue for the swift expediency of money transferring from one unregulated hand to another. However, that is the subject matter for another posting.

 Original article for Money for Lunch 2/2016