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Comment by phtrivier | Hacker News Reader

Is there a good primer on how this kind of offshoring works, for people ? I have notions of how tax evasion / optimization works (things like the irish-dutch sandwich, where you manage to pretend that Google does not make any money in France because it has to pay a very expensive license to Google Ireland , etc..)

But for offshoring, I'm clueless as to how manage to "reshore" the money, so to speak, so that you can eventually... Spend it to buy stuff. (Or isn't that the purpose of hiding the money ?)

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Brooke Harrington (one of the professors from the OP article) has an excellent book on the topic, called Offshore.

Naive take, they never reshore, but take loans with assets as collateral.

That’s my understanding of how modern money laundering works. Can’t move your money out of a particular bank due to regulations? Use it as collateral to loan money to any other entity you wish. Fancy.

I talked to someone recently who claimed to know someone personally with 16,000 metric tons of gold. He claims that there is waaay more gold than is officially on the books. Hard to believe… but maybe not. He claims that there is unbelievable wealth out there—many more hundred-billionaires than official stats hold. Ok. Who knows?

> 16,000 metric tons of gold

There are approximately 200,000 tons of gold ever mined in total.

That’s what he disputes…

And I know someone with a stash of 100000000 bitcoins. The yield of gold mines is known, and it's pretty easy to extrapolate into the past.

I understand where all these conspiracies come from. It typically starts with "there must be enough gold to back all the savings, because Bretton-Woods or something". Then they check the total cost of the world's gold. It's a small fraction of the total savings.

So obviously most of the gold is hidden somewhere.

I guess it’s the sort of thing that encourages secrecy even into the far past — from both the takers and those from which it was taken from. How to know mining yields and extrapolate past mining?

https://chatgpt.com/share/687a0a4c-6bd4-8007-bec8-2683ef49df...

But after some research, I’m convinced. We mine a lot more gold today than in the ancient past. Not much more gold left to mine, though — at current rates, we are done in 20 some years! I find that also hard to believe, but so it goes.

We mine a lot more gold today than in the ancient past. Not much more gold left to mine, though — at current rates, we are done in 20 some years! I find that also hard to believe, but so it goes.

We're not going to stop mining gold in 20 years. That's probably an estimate derived by dividing known reserves by current production rates. But that number is just an artifact of how "reserves" are defined. See this publication from the United States Geological Survey:

"Mineral Reserves, Resources, Resource Potential, And Certainty"

https://pubs.usgs.gov/unnumbered/7000088/sta13.pdf

Reserve: That portion of an identified resource from which a usable mineral or energy commodity can be economically and legally extracted at the time of determination.

Miners continually quantify geological features to turn them into known "reserves." Some identified ore bodies also get converted into reserves by rising commodity prices or improved extraction techniques. No new ore bodies have formed in the past 60 years, but new reserves have continually been identified.

This misunderstanding is why people keep (wrongly) predicting that the world will run out of e.g. indium; even people who are otherwise educated make this mistake:

"Augsberg University Calculate When Our Materials Run Out - Soon" (June 4, 2007)

https://www.printedelectronicsworld.com/articles/591/augsber...

Armin Reller, a materials chemist at the University of Augsburg in Germany, and his colleagues are among the few groups who have been investigating the problem. He estimates that we have, at best, 10 years before we run out of indium.

It clearly did not run out by 2017:

https://commons.wikimedia.org/wiki/File:Indium_world_product...

What is more likely, that your friend knows all about thousands of tons of secrete gold mined without anyone knowing, or that with constant satellite pictures of the earth, people actually do know roughly how much gold has been mined?

It it isnt being used, it basically doesn't matters. The only interpersonally relevant aspect is spending and consumption.

If the guy living under the bridge has 1 million metric tons of tons of gold they don't spend, it is functionally equivalent to if they had none.

$1.7 trillion or 2* the holdings at Fort Knox? All the Royal Houses of the Arab Gulf can't even have that much money liquid, even with 365 days' heads up. And, no: don't do a "trust me bro," here. At their peak, ARAMCO made $161b in profits in 1 year - and the bulk of that goes towards the general pop. in the form of subsidies, etc. Simply, $1.7 trillion doesn't exist anywhere in such liquid form.

If you claim there are hundreds of stealth billionaires with $1-$20b in cash & assets, I'll readily believe that: African kleptocrats' kids, Middle East royalty, European heirs with a low profile, Russian oligarchs, etc. But, not $100b. Or a trillion. That's an insane amount of money, larger than the GDP of like 80% of the world's countries.

> But for offshoring, I'm clueless as to how manage to "reshore" the money, so to speak, so that you can eventually... Spend it to buy stuff. (Or isn't that the purpose of hiding the money ?)

Why would you reshore the bulk of funds? We're talking about people for whom a couple of million is just spare money.

If you want to buy a company, you just use the offshore funds directly. If you want to buy a major luxury good (a yacht or a jet), you do the same and then just lease/rent it to yourself.

If you _absolutely_ need cash in the US, you can pay yourself dividends and take a hit paying taxes on this amount only.

Maybe a bit late to comment, but for what it's worth: There is no primer that could be actually useful, because the "tax optimization" landscape is fragmented and constantly shifting. Everything depends on where you live, where you do business, how much much money is involved, etc.

But there is a central driving force behind it all: governments constantly fight for "tax justice" with one hand and create various "incentives" and exceptions with the other, in an effort to briefly gain the upper hand over other countries in the zero-sum game of attracting international capital. The former tends to plug all possible loopholes for the "ordinary wealthy", while the latter always leaves options for the truly big fish, they just don't stay the same decade-over-decade.

>Is there a good primer on how this kind of offshoring works, for people ?

There isn't. People with deep knowledge of this don't invest their time writing blogs. Bit like OpenAI employees don't write blogs about how to train world class models. It's just not a thing.

There is an abundance of shrill articles by journalists writing about it that derive their knowledge from other articles written by journalists who in turn...

The big tech stuff flowing through Ireland is indeed lets call it convenient for both ireland and big tech, but what people don't realise is that chances are very high that their own pension likely flows through offshore structuring too. These places act as a central neutral clearing house of sorts that is acceptable to a lot of jurisdictions so even actors not after tax evasion use them.

Sure, I'm not expecting a tutorial on how to offshore my money. However, to follow you point: openai does not explain how they train _their_ models, but there is plenty of material out there about how models are trained "in general" (kharpaty's videos, for example.)

On the same vein, I perfectly expect off shoring practices to be kinda "secret and sensitive information", as they are basically "exploits" of tax code - but that does not mean that all cybersecurity books are "shill".

The people who implements offshoring have to learn from somewhere, so there is written tracks. It might even be taught in accounting schools, assuming that some part of it is in a gray area, "legally."

This is the kind of very high level info I'm interested in.

>how to offshore my money.

Chances of it being helpful to you is quite low. It's expensive and mostly works in corporate context.

>The people who implements offshoring have to learn from somewhere, so there is written tracks.

All on the job. Hop on a plane to caymans or whatever, spend half a decade working at a service provider there and then you'll have seen various implementations.

Keep in mind that this stuff changes all the time as the various countries' laws shift and each structure is essentially a once off custom design.

>It might even be taught in accounting schools

It's not.

At the multinational level you never have to actually reshore anything. The corporation buys things, or you take loans at incredibly low interest rates using corporate assets as collateral. Using made up numbers, imagine you take out a $1M loan, you get charged 1% interest, you put up $2M in corporate assets as collateral, and the corporation pays the bill directly.

So the lender accepts money on an offshore account as collateral to your corporation ? Which means a lot of people "know" that you're behind the account ? Do they pretend not to know, or are they layers of people that know less and less to give plausible deniability ?

(Or maybe they're the discrete kind, and they won't tell anyone. And we're back to "whether USA plans to invade Switzerland in the coming months ?", I guess)

The way money is re-shored is whenever a US President (so far only republican Presidents) decide to give companies a tax holiday. So far Bush and Trump gave such holidays. Which means that corporate treasuries only have to wait for the next Republican president to re-patriate their off-shore cash. During this time corporations usually use debt to service dividend payments, share repurchases, and operating expenses in the US.

https://en.wikipedia.org/wiki/Repatriation_tax_holiday

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