Saudi Arabia, or more precisely the prince pretending to power and favorite son of the king called Crown Prince Mohammed bin Salman, arrested at least 11 other princes, four ministers and tens of former ministers on charges of corruption. One might think a sweeping reform, one country needs to develop and progress – unfortunately anyone remotely familiar with the power games of politics, knows its a strategic move to cement ones power. As Machiavelli said over 500 years ago "Men should be either treated generously or destroyed, because they take revenge for slight injuries - for heavy ones they cannot."
Amongst the arrested was Prince Alwaleed bin Talal principal stakeholder of investment firm Kingdom Holding, one of the world’s richest men, owning or having owned major stakes in 21st Century Fox, Citigroup, Apple, Twitter and many other well-known companies. The prince also controls satellite television networks watched across the Arab world, hence controlling a powerful propaganda tool that can be used against the state.
And if something, we know that the ultra conservative Arabian peninsular kingdom fills all criteria for playing this middle age game. A wealthy pond of oil, full of competing royalty players, a power game of a nation that passed an extremely quick road from dust farmers to power players. However, mentalities don't change as quick.
There is a anecdote taught in the University College in London about Stalin's 10 year plans back in the 1930-s. They say Stalin invited a group of British engineers to help out with the plan fulfillment, as the communists lacked the intellectual elements having gotten rid of them in the purges a few years back. So they severely lacked highly educated (but dogmatist) engineers. "Tell me what I need to do" said Stalin. "What school lessons do we need organised to pop up a few engineers. I'll grab a few farmers from the Urals and put them trough the course." The British paused for a moment. "Mister Stalin, for a good engineer, you need a man,who's grandfather was an engineer, and then his father was an engineer. Only then will you get an engineer that can actually carry that name."
Same works for the principles of market. Saudi Arabia was propelled by oil reserves from the middle ages all the way to modern day richness in an unbelievably short time. Not enough to overcome ideas such as women subjugation and slavery in everything but name.
So, where does this link to cryptocurrency? Well, all this would not have a ironically silver lining to it if the arrested Prince Alwaleed bin Talal didn't give an interview not a month ago in which he said he agreed with J.P. Morgan Chase & Co. Chief Executive Jamie Dimon, who likened bitcoin to the 17th century tulip mania, an early market bubble, and branded cryptocurrencies a “fraud” that would eventually implode.
"It has no value tied to real work and fits all the criteria for a fraud."
Now, had the prince, held a bit of his 11bln dollar wealth in cryptocurrencies, he would have been able to avoid the seasure and the, concequentlly maintain some of his authonomy that his wealth provided to him. This way, government was able to track his financial resources, dealings and assets, and by using the power prerogative freeze it, take it away or condition him in order to have him comply. Now, unless our prince has a pot of gold in some safe house, he effectively lost his independence. Even the existence of physical gold implies the need of actually going and getting it, and if it is somewhere unassailable, it is as good as gone. Now, if only it was on a USB....
But that's Saudi Arabia, you might say. We live in a civilized world. Governments work for the benefit of us all, don't they. In theory, yes. In reality, you can be subjected to any of the following: Roosevelt's confiscation of gold 1933, making owning the material illegal. Serbia freezing of assets in foreign currency out of the need to finance a war in 1990, Cyprus overnight tax 2013 that takes away 10% of your income. Remember, state is not a magical institution, it is people! Sometimes bad people. People who can and will abuse the information provided to them in order to encroach on the basic right of man to interact with another man, and trade the product of ones work for the product of anothers.
In the long run, it is always smarter to own a bit of your wealth in assets that allow you to maintain your liberty.
Such is SAFEX. Look it up.
