Pietro Odorisio’s Post

How do the new age “Narcos” and “Griselda” launder money worth billions of dollars a year that their business generates back to Mexico? I was pleasantly surprised that it became cheaper thanks to business model innovation by the money launderers (aka the Chinese underground bankers) 😂 🤦♂️   Previously, Mexican launderers used to charge 8-12% but enter the Chinese with their long-known Feiqian system where the money doesn’t cross borders but still, a transaction is done (i.e. similar to Hawala)   A simplified version of how it works? ·     Drug dealer "A" with $ gets in touch with a Chinese money launderer B. ·     Launderer "B" takes the $ and offers it to Chinese citizen "C" trying to get hold of it as there are strict controls on how many $ you can officially buy by the Chinese Government. ·     "C" transfers Yuan (i.e. Chinese currency) to launderer "B"’s local account in China and takes delivery of $ ·     Launderer "B" then buys goods with Yuan that he got from "C" and ships them to Mexico ·     Goods are then sold in Mexico and Pesos are returned to the cartels of drug dealers "A"   Their business model innovation – Make it cost-effective (in this case near zero) for drug dealers to launder money and make money on the other side of the marketplace (i.e. Chinese citizens trying to access dollars) Source: The Economist

Disturbingly simple example of how money laundering can (and does) work. And how many innocent and not so innocent people are involved in the process, making the tracking all that much more difficult. As flagged by this article, the only real chance the government has to flag this transaction is a single required Currency Transaction Report (CTR) at a large cash transaction. So much riding on this one report…

It was a pleasure to speak with Andrew Work on Radio Television Hong Kong (RTHK) Money Talk last week alongside Andrew Freris, where we explored the IMF’s updated China GDP growth projection for 2024 at 5%. Not everyone seems to realise from how high a base level this is being achieved nowadays, as 5% of its GDP (18.5 tn) equals 926 bn, which means that China is adding 2 Vietnams (GDP 466 bn) to its economy each year – demonstrating resilience non-withstanding many challenges to be worked out from property to general confidence levels. It was also discussed how the factors of high deficits/sovereign debt in a number of major economies, coupled with the prospect of rising tariffs globally and geopolitical conflicts might reinforce inflationary risk to be accounted for when making asset allocation decisions. Thank you for having me! You can listen to my interview in full here: https://lnkd.in/gy5a9sAc [rthk.hk] #SJPAsia #China #Inflation #Property #GDP  

[Market News] At the end of September 2023, China and Brazil achieve landmark trade in local currency. The full process of RMB-based trade transaction involves using RMB for denomination, settlement and financing, and directly exchanging the RMB for reais. This took place for the first time in the China-Brazil trade history, the BOC said.  #homeshowbrazil #marketnews #tradefair #b2bfair

https://lnkd.in/e3AtUujw #190 China International Payment System (CIPS) CIPS, which stands for China International Payment System, is a cross-border payment system established by the People's Bank of China (PBOC), China's central bank. It was launched in October 2015 and is designed to facilitate international trade and financial transactions denominated in Chinese Renminbi (RMB) or Yuan. The primary purpose of CIPS is to provide a more efficient and convenient platform for settling cross-border transactions in RMB. Before the establishment of CIPS, many international transactions involving the Chinese currency had to be processed through correspondent banks in other countries, which could be time-consuming and costly. CIPS aims to streamline this process and promote the use of RMB in international trade and finance. Key features of the CIPS system include: 24/7 Operation: CIPS operates around the clock, allowing for real-time processing of cross-border RMB transactions, which can improve the speed and efficiency of international trade. Direct Connectivity: CIPS allows direct connectivity for financial institutions and participants, reducing the need for intermediaries in cross-border transactions. Enhanced Risk Management: The system incorporates advanced risk management features to ensure the security and reliability of transactions. Broad Coverage: CIPS is designed to cover a wide range of financial institutions, including banks, non-bank financial institutions, and other eligible participants. Support for Various Payment Types: It supports various types of RMB payments, including both wholesale and retail payments. Global Reach: While CIPS was initially established to facilitate RMB transactions for trade with China, it has the potential to expand its global reach as the use of the RMB in international trade and finance continues to grow. CIPS plays a crucial role in China's efforts to internationalize its currency and reduce its dependence on the U.S. dollar in international transactions. It provides an alternative to established international payment systems like SWIFT (Society for Worldwide Interbank Financial Telecommunication) for settling transactions involving the Chinese currency. www.antharas.co.uk/ companies website or top book distributors! #BusinessStrategy #Entrepreneurship #Leadership #Management #Marketing #Finance #Startups #Innovation #Sales #SmallBusiness #CorporateCulture #Productivity #SelfDevelopment #SuccessStories #PersonalBranding #Networking #Negotiation #BusinessEthics #TimeManagement #GrowthStrategies #MarketAnalysis #BusinessPlanning #FinancialManagement #HumanResources #CustomerExperience #DigitalTransformation #Ecommerce #SocialMediaMarketing #BusinessCommunication #ChangeManagement

Bloomberg discuss the potential impact of trade documents digitalisation in combatting fraud within the $25 trillion global cargo trade sector, with notorious cases such as ING Group NV discovering falsified bills of lading when issuing credit to to Singapore's collapsed commodities trader Agritrade resources, and the International Chamber of Commerce (ICC) estimating that around 1% of transactions in the global trade financing market - tantamount to $50 billion per year - as fraudulent, highlighting the imperative for systematic progress. The Electronic Trade Documents Act 2023 entered into force within the United Kingdom, on 20 September 2023, with Lloyds Bank and digital platform Enigio AB reported to be the first to arrange a transaction under the new legislation, through the issuance of a promissory note. Now the key question is how to encourage market adoption, and how to change processes which have been in place for hundreds of years. #internationaltrade #tradedigitalisation https://lnkd.in/e5iFpr7F

From 2010 to now, most of China's international payments were done in US dollars, like in other nations. However, in the first quarter of 2023, this has changed. Check out this informative graphic by the Hinrich Foundation, illustrating the increasing popularity of the #Chineserenminbi both locally and worldwide: https://bit.ly/3XNbaNl

PRC🇨🇳, the world’s 2nd largest economy in 2024, has been steadily asserting their weight by getting away from the 🇺🇸 dollar as a reserve currency, and also Rimnibi-izing the world’s economies it is asserting influence over in the “silk road” strategy they have been pursuing for a long time now. Along with the 🇪🇺 doing the equivalent, the global reserves are sure to balance a bit more equitably monetarily while political risks will surely remain.

Let's revisit the history of world currency and think about what's next.

Interesting chart. Not a great trend for the US to continue to grow the deficit and allow debt to GDP to balloon while at the same time losing transaction volume and subsequently demand for US dollars/debt in the global market place. As we issue more and more debt to support our spending/borrowing habits, what happens as demand for that debt continues to move the opposite direction? At some point, there is a strong possibility of a reckoning if we can’t get our balance sheet under control. This isn’t an actionable thought from an investment standpoint today, but it is certainly something to keep an eye on.