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Berlin 1980.

An aging Soviet missile scientist named Rosov Pietrov goes missing from his home in Leningrad. The Russians need to find him and assign the spy master Andre Peshky to resolve the matter.

But the British have intercepted Russian signals traffic.

Harry Thornton, an owl lover and a functionary in the British spy service takes it upon himself to cap his long career by bringing Pietrov to the West.

Meanwhile, the Americans have intercepted British signals traffic, and send a young special forces Army officer, Paul Bastia, to find Pietrov.

The search for Pietrov focuses on the divided city of Berlin.

Ever fascinated with the divided city, I wrote this novel in the 1980s, and published it then in both the US and the UK. More than 30 years later, I have gone back into it, and tampered slightly. It's a rare treat for an author to be able to do that with an earlier work, to bring so many years of storytelling experience to make it better. I did it because I've always liked this story, and because Berlin in those days is unforgettable.

Today, reunited Berlin is a vibrant, fabulously sophisticated, cultural city. But in those days, when American tanks at Checkpoint Charlie stared down Russian tanks, the Wall that cut the city in half was a stark, daily reminder that the Cold War had frozen over.

This novel is about that.

It's about the divided city at the very height of the Cold War, about two pawns in a complex chess game that nobody could ever win, and about the foolishly dangerous games that the world's powers played there.

The wonderfully talented best-selling author Nelson DeMille was generous enough to call this book: ""A fast paced, yet marvelously complex story."


The excerpt below finds Harry Thornton in his room at the Kempinski Hotel on the Kurfurstendamm, trying to recreate his long-gone glory days with the spy service, by sending himself a coded message to avoid paying his Berlin contact (Ursing) for finding Pietrov.


© Jeffrey Robinson 1985, 2015


He thought again about the deal with Ursing.

Payment after the second one. It worked then. Maybe it will work now. Maybe if I send Ursing on a wild goose chase to find someone who doesn't exist, he’ll turn over Pietrov without asking for money in advance. Then, once I have Pietrov safe in London, with Ursing still looking for this mythical person, the proper payments can be made.

There was a cardboard folder on the desk, with envelopes and hotel stationery stuffed inside. He sat down, took several sheets and a ballpoint pen and started to make a list.

He’ll be a Russian, of course. Name... Ivan? Good name, yes, Ivan.

He tried to remember if he had ever met any Ivans because it was always best to use a real person in a situation like this.

He thought back to his Moscow trip with Bathgate. What was their driver’s name? He couldn’t remember.

What’s an even better Russian name. How about Senyk? Of course. Vladimir Senyk. Why not? He’ll do as well as Ivan anybody else.

Now he had to decide just who Senyk should be.

Occupation... scientist? Double agent? Spy? No, nothing like that. It’s got to be something simple. Something real. Taxidermist? That was certainly real, but would Ursing ever believe that the British government was willing to pay to help a taxidermist defect?

He pondered that for quite a while.

  1. Senyk, Taxidermist. It’s just wild enough that Ursing could well believe it.

He continued writing his notes.

Value to GB? This is the difficult part. Why on earth would Her Majesty’s government be willing to pay to help someone get to the West when all he did was stuff dead animals?

Harry pondered that for a long time.

The obvious answer is, our taxidermist has something the British want. Like what? Secrets. But secrets of what? How about... No.

He changed his mind. Instead of secrets, he decided to use the two Czech girls model.

Ursing will believe that because he’ll remember that it happened before. He won’t question it happening again. We’ll make it a personal matter. We’ll make Senyk related to someone. We’ll use the House of Lords. Or perhaps a minister. Or, how about the PM? My God... this is getting better all the time. We’ll go all the way with this. Senyk will be related to the PM, on her mother’s side, of course.

He was very pleased with the way this was working out.

Value to GB... family of...

He crossed that out and tried to come up with another way of putting it.

How about, strictly personal? Yes, we’ll classify the matter. strictly personal/strictly secret.

He looked at that.

Even better, strictly personal/strictly secret-CEO.

Cabinet eyes only.

He liked that phrasing best of all. It added a tone of mystery.

And I won’t actually tell Ursing everything about this. I’ll lead him along so that he himself comes up with bits and pieces of the puzzle. Basic O-Level psychology. If Ursing thinks of it himself, he’ll be more inclined to believe it.

Next came, whereabouts?

He settled on, East Germany.

Then, contacts.

This will be delicate. How about if I tell Ursing that Senyk is a dissident. He’ll be part of a dissident movement that has worn thin the patience of the rulers. Not part of the Sakharov group. Maybe the last vestiges of the Pasternak era. Yes, very good. Senyk will have found himself put out to pasture by the current group of dissidents and squeezed by the rulers. Caught in the middle. Considered a revisionist by both. That’s the right kind of stuff. I’ll tell Ursing that as long as Senyk was useful to the movement in the Soviet Union, the PM never wanted to interfere. No, better still, I’ll say that, as long as Senyk felt useful to the movement, he never tried to impose himself on the PM. But now that he’s caught in this bind, he’s contacted her and she feels she cannot let him down.

He reread the list but felt that “Whereabouts - East Germany” was too simple. He crossed out East Germany and wrote Budapest.

Why not? Senyk was there at a convention. Surely taxidermists go to conventions, even behind the Iron Curtain? Yes. And he’s back there now, on his way to East Germany, and the PM wants him out. Very good. Ursing will go for it, I’m sure he will.

Sitting back in his chair, Harry enjoyed the glow of satisfaction that comes from a job well done. He put his pen on top of his notes and looked at himself in the mirror that hung just over the desk.

Like the old days. This is now just like the old days.

He poured himself another Scotch.

Now he reasoned, I’ll need a telex. I’ll need something that looks like it’s in code. That way Ursing will think that I’ve just been informed of this. That it’s Whitehall who is refusing to pay him any money until the PM’s relative is delivered. That way Ursing will think this has a very high priority. I must speak to Daleham.

He dialed and it rang, but still there was no answer.

I don’t know what they’re playing at. Damn.

He thought about eating something, but he didn’t want to leave the phone. He also didn’t want to leave that gun in his room.

Just my luck the maid will look in the case hoping to steal spare change. How could I ever explain such a thing?

He thought about room service and decided that would work perfectly well. Except he wasn’t really sure he had much of an appetite. Maybe later.

He took his address book and looked for Daleham’s home number. Mrs Daleham answered.

“He’s not home,” she said.

“Where is he?”

“Not home.”

“Can you find him? This is Mr. Thornton.”

“Oh, ‘ullo, luv.”

I am not “luv”, he wanted to say. She always called him “luv”. One of these days he would tell her, “Madame, I am not your luv.” This time he settled for, “You must reach him and have him ring me right away. He’ll know where to find me.”

She said, “Right, luv. All the best.”

God, how I would hate to be married to a woman like that. Luv and guv and ‘e and me.

He took the phone again to call his wife. “Hello, dear, I just thought I would ring to see how you are.”

She sounded half asleep. “Where are you? What time is it? Harry, is that you?”

“Yes, yes, dear, did I wake you?” He checked his watch. It was only 10.30 in London. “Have you gone to bed already?”

“Oh, Harry, dear, you woke me. I’ve gone to bed early this evening.”

It was 10.30 already? “Well, dear, I’ll let you get back so sleep. Pleasant dreams.”

“Good night, Harry. I think I want to go back to sleep.”

He could use some sleep himself but first he had to get in touch with his office.

Where the hell is Daleham? I need that telex if this is going to work. Why aren’t they following set procedures? How many times have I told them, you must always follow set procedures? Well, at least I’ll follow set procedures. I’ll get a message through to someone.

He rang Senyk’s number. The answering machine came on. “This is the automatic answering machine for V. Senyk. I regret that there is no one here at the present to take your message. You see, none of my birds knows how to answer the phone. However, if you will be kind enough to leave your name, your number and a short message when you hear the tone, either I or one of the birds will ring you back very shortly. That they know how to do.”


“...ah... ” He knew what he wanted to say but the words wouldn’t come out. He hated to be caught on answering machines. “Ah... ”

He hung up.

Ghastly things. So damned intimidating. And why is it that people who own them always make it so much worse by using them for quips and jokes? Damn.

He reached for the phone again and re-dialed Senyk. This time he forced himself. “Yes, hello, this is Harry Thornton speaking...” He felt flustered. “I need to speak to my office.” He couldn’t think of anything else to say. “Thank you.” He hung up.

That should do it, that should be sufficient, he reassured himself. Yet he couldn’t understand where Daleham was and why Kingsley hadn’t passed the message on to him.

I specifically told Kingsley to pass along the message to Daleham. I specifically told Kingsley to tell Daleham to ring me. If I don’t get that telex, Ursing will never swallow the bait.

It was too late to eat a proper dinner although he decided he was indeed hungry. So he called room service to ask if they had any soup.

“Yes, of course we have soup. We have goulash...”

“No, thank you,” he said, “not at this hour of the night. What about a consommé?”

“Yes, we have consommé.”

“All right, please, one consommé for room 227.”

“Will that be all?”

“That will be all.”

Now he went back to his desk and wrote a draft of a telex.

It’s got to look like it’s in code. How about...

The room service menu was within easy reach.

He took a sheet of Kempinski stationery and drew three columns on the page. In the first column, he listed the words, strictly Personal/strictly secret, and the letters... c, e, o, s, e, n, y, k.

Then he opened the menu to the English translation and started copying down words from it. Salmon next to the first Strictly. Peas next to Personal. Salad next to the second Strictly, and Soup next to Secret.

For the letters he wrote caviar, eel, onions, strawberries, eggs, noodles... and stopped at y.

What kind of food starts with the letter y?

He couldn’t think of a single one.

I’ll come back to it later.

For k he wrote kippers.

Then, in the third column, he wrote the German translations of his chosen English words. Lacks, Erbsen, Salat, Suppe, Kaviar, Aal, Zwiebeln, Ei, Nudeln.

He suddenly remembered Y is for yoghurt. But he didn't know the German word for yoghurt. That ‘s when he realized that he didn’t know the German word for kippers either.

He called room service again. “Your consommé is on the way, sir.”

“Tell me something,” he asked in English. “What do you call yoghurt?”

“Yoghurt?” The boy taking the room service order asked. “I call yoghurt, yoghurt.”

“No, in German. What is the German word for yoghurt?”

“Yoghurt is joghurt. The same as in English but with a j.”

“Ah yes.” He wrote down Joghurt. “And kippers? Do you know what kippers are?”

“Like you have in England?”

“Yes, like we have in England.”

“That is... let me think... Raucherhering.”

So it is, he thought and jotted down that word too. “Yoghurt with a j and Raucherhering. Thank you very much.” Now he had it all.

The next step was to add a few miscellaneous words and numbers.

How about... confirmed menu?

Next to that he put the time... 11 pm.

I’ll tell Ursing this has come directly from 10 Downing Street, with the “p.m.” being the PM’s signature.

He had to smile at how well this was going.

The next problem is that I must somehow get Budapest in there and East Germany too. How about if the message ends, “Begin Hungry, Eat Good.” Yes, that’s it. But no more than that. Shan’t overdo it. Stop there. Quit while you’re ahead. It’s perfect just like that.

He copied the exact message down on another piece of paper so that he could read it to Daleham.

Where the hell is Daleham?

He tried the office number and was surprised, this time, when Daleham picked up the phone.

“Where the hell have you been?” Harry demanded. “What in God’s name is going on?”

“Sorry, guv,” Daleham said. “Just a minor misunderstanding. Nothing serious. Everything is back on track.”

“What kind of minor misunderstanding.”

“Not now, guv,” Daleham said. “I’ll explain another time.”

The hell you will, Harry thought. “You’ll tell me right now. Don’t you understand how serious this is?”

Daleham seemed to hesitate. “Well, all right. If you must know, I mean, I’m never one to tell tales out of school, but it’s Kingsley.”

“What about him?”

“Well... I was just coming on shift and he met me at the door and I didn’t have me keys with me, and when he bent down to get the milk, eggs and bacon, the door closed with the two of us on the outside. We got locked out.”

I don’t believe how clumsy they are.

He sighed. “You got locked out? Why didn’t you have your keys? How did you get in? And what are you talking about, eggs and bacon? Since when do we have eggs and bacon delivered?”

“I didn’t have me keys because the wife... ”

“Never mind,” Harry said, “never mind.” He didn’t want to hear another one of Daleham’s lengthy stories. “Just listen to me. Copy this down as I read it to you and then send it to me as a telex care of the hotel.” He read out the message but had to stop after each word so that Daleham could repeat it and spell it. “Yoghurt with a j”

“Got it,” Daleham said.

“Now read it back to me just to make sure.”

He did. “But what does it all mean?”

“Never mind.” Harry wasn’t going to let anyone in on his secret. “I’ll tell you when I get back. Is there any message traffic on our friend?”

“No sir. But oh, I have arranged for the money to be transferred by wire to you in the morning. You’ll get it at the hotel.”

“All 300,000 marks? How did you...?”

“Sorry, guv, what 300,000 marks? I have written here £6000.”

“Yes, fine, well done. We will be needing some more, but perhaps not right away. I’ll let you know. So... is that all?”

“That’s all, guv. You keeping well?”

“Fine. I’ll speak with the office in the morning.”

Someone knocked on his door.

“I’ve got to go. Goodbye.”

“All the best,” Daleham said.

Harry hung up. It was obvious that Kingsley had failed to pass the message on.

Thank God Daphne and I don’t sound like each other.

It was room service.

A waiter wheeled in a tray and gave him the bill to sign. Harry found a few marks as a tip, signed the bill and locked the door as the waiter left.

He pulled a cover off of a soup bowl and looked at the consommé.

But there was a second cover.

He pulled that off and stared into the plate... two kippers smothered in a mound of yoghurt.



The Finanser Interviews: Jeffrey Robinson, Author of “BitCon – The Naked Truth About Bitcoin


By Chris Skinner

Jeffrey Robinson is a native New Yorker and an international bestselling author of 30 books.  He is a recognised expert on organised crime, fraud and money laundering, and has been labelled by the British Bankers’ Association as “the world’s most important financial crime journalist”.  After my recent coverage of bitcoin, the blockchain and cryptocurrencies, he got in touch to provide the other view of this world.  As his most recent book is a year long investigation into the other side of bitcoin – “Bitcon: The Naked Truth About Bitcoin” – the conversation proved fascinating.

— What is your background with bitcoin and how did you find some of the activities with bitcoin rather suspicious?

A few years ago, someone told me that bitcoins were good for money laundering. And after books like The Laundrymen, The Merger, The Sink and The Takedown, serious books about the serious business of dirty money, I was interested. So, I looked into it and eventually came to the conclusion, as I say in BitCon – The Naked Truth About Bitcoin, that it is, in fact, not good for money laundering. The system moves it but doesn’t inherently disguise the origins of illegal funds or help them reappear as legally obtained funds. However, bitcoin is great for capital flight, terror finance, tax evasion, extortion and criminal finance. But, for money laundering, it basically sucks.

Still, I wanted to know more so I went to one of these Bitcoin meetings.  One of these big convention type things that they hold all the time. I was awestruck at the general level of naïve stupidity. These were pre-pubescent kids. It felt like a bad high school reunion. Everyone was keenly intent on convincing me that the dollar is dead; that Bitcoin was about to take over the world; that all the central bankers should be thrown in jail.

I said to myself: “If this is what the Bitcoin movement is all about, it has no chance whatsoever.” But, over lunch at that meeting, I spoke with one of the few grown-ups in the room about the technology. It dawned on me that maybe there is something here when it comes to the transferring of assets.

The way I see it, and the way he saw it, too, with greater development of asset transfer there will be greater emphasis on valuing those assets in dollars and pounds and euros. That means the pretend currency will become increasingly useless and eventually disappear.

By the way, I call it a pretend currency because it doesn’t satisfy any of the three main criteria for modern currency. Furthermore, it is traded like a pretend commodity on what I have come to believe is a pump and a dump market; where very few people control the market and the gullible lose money.  Only the few people who control the market make money.

The more I got into this the more evident it became to me that, if you could separate out the lunatics, the delusionals, the pump and dump schemes, the pretend currency and all of that, and get to the core blockchain, you might actually have something interesting. It was with that in mind that I went and spent a year running around Planet Bitcoin, talking to a lot of people and asking the kinds of questions that I didn’t see anybody else asking.

— I find it intriguing, in your book ‘BitCon’ that you quite clearly lay out the idea that the currency has no future. And yet, when you talk to the fundamentalists in the community of the Bitcoin world, they believe you can’t have a blockchain without bitcoin.  The two are integrally tied together. Do you agree with that view?

No, not at all. This is the old argument of: “The Catholic Church is the only church, and everything else is heresy.” It simply isn’t true. Preston Byrne in Eris is working on a blockchain that has nothing at all to do with bitcoin. Ripple has nothing to do with bitcoin. People don’t want to know about bitcoin because it is surrounded by so much hype, spin, misinformation and outright fantasy, and it’s too clumsy.  On the other hand, if you have a bank or a group of banks that could operate a centralized or closed blockchain just among themselves, for the transfer of assets back and forth, that could work.  This bank or group of banks could, say, send money from the US to London and back and forth, and if it was just these banks working on these settlements, you wouldn’t need bitcoin. You wouldn’t need the miners as you don’t need any mining. It’s a closed ledger that the banks control, and the banks essentially are inventing their own blockchain.

Of course, that’s seen as heresy by the bitcoin faithful. But look at the concept of decentralization. It’s a political ideology. “I don’t want the government involved”.  That makes it non-commercial. How about if the banks don’t want to turn over their money for the ten minutes that it takes the miners to verify each transaction, which means they temporarily lose control of the money. A couple of months ago, transactions were taking an hour and a half or almost two hours. No bank is going to give up control of $100 million for two hours, especially when you consider that much of it will be verified by miners in China. It’s not going to happen. The decentralisation political ideology does not conform with what the banks want. They want a commercial solution. What they’re looking for is a centralized, or closed, blockchain.

Now, the faithful will say, “You can’t have a centralised blockchain, it’s just a database”. Well, decentralized blockchains are just a database. There are efficiencies and inefficiencies in that database, so you take the great efficiency of the decentralised blockchain, you centralize it, close it, and you can say bye-bye bitcoin because no one needs it.

— I can see both sides of the argument in some ways and right now we are seeing a lot of the banks on Wall Street starting to play. For example, UBS recently announced that they’re incorporating laboratories to develop blockchain technologies to reduce cost.

That’s right, but they don’t say they’re getting into bitcoin, the pretend currency.

— No.

You see this is part of a hype and spin and why we need to separate the pretend currency from the blockchain.  Every time someone speaks of the technological advancements, the bitcoin faithful immediately equate it to a success for the pretend currency. But it’s not. As a matter of fact, there are no bitcoin pretend-currency successes. I can’t find even one of them. You talk about the VCs in Silicon Valley and London and Canada, especially the big ones who have invested upwards of a half a billion dollars. The investment is not in bitcoin the pretend currency; it’s in the concept of blockchain technology.

I think Marc Andreessen gave the game away when I contacted him for BitCon. He said, “My only interest is in finding practical solutions to real problems”. When you think about that, he’s developing businesses that will ride off the back of the blockchain. What he needs to do is sell it to somebody. So, if it’s a financial thing, he’s going to have to sell it to a bank or a finance house. If that bank or finance house says, “We have no interest in this pretend currency, we want it in dollars and pounds”, he’ll abandon bitcoin in a heartbeat. He has no loyalty to the pretend currency, none whatsoever. No one does. Except speculators and the guys trying to flog it to greater fools. In fact, Andreessen told me how he hardly has any of it. He doesn’t own a lot of it.

— Yes. If you look at Marc Andreessen, in particular, you can see his VC fund Andreessen Horowitz investing heavily in the technology developments, such as Ripple, rather than the currency.

That’s right. That is their only interest. You’ve got $500 million approximately invested in this technology. None of them have seen real returns yet. How sustainable is that if it goes on for another two or three years? It’s not. These guys are only interested in seeing two, three, five or ten times their return on money and, if they’re not making it, they’re going to pull out and put their money into someplace else. That’s how venture capitalists stay alive.

I really blame the media for a lot of this. I don’t blame the bitcoin media, because there is no bitcoin media. They are simply regurgitating PR releases. CoinDesk is not journalism. I’m sorry, but it isn’t. However, the mainstream media – CNN, BBC, the Wall Street Journal, the New York Times, Forbes and the like – aren’t asking the right questions. They are blinded and enamored by the idea of bitcoin. They keep rehashing this “bitcoin is the currency of the future” crap and never look beyond it to say: “Hold on a minute, this stuff can’t stand a close scrute”.

For example, Dish Network, Dell, Expedia and others supposedly “accept” bitcoin, at least according to the press reports. The truth is that they don’t “accept” it. They simply allow you to pay in bitcoin. And those payments go through Coinbase or BitPay.  This is because Dish and Dell and Expedia and the others don’t want anything to do with bitcoin. Allowing a customer to pay with bitcoins is not an endorsement of bitcoin, it’s a marketing ploy.

Microsoft is not endorsing bitcoin. Bill Gates said recently something about how crypto-currency may be the future of finance. Right. So, immediately the media screams, Bill Gates endorses bitcoin. No, he doesn’t. Apparently Bill Gates doesn’t even have any bitcoins. That’s the kind of hype and spin and misinformation that really drives me nuts. It’s a failure of journalism to do its job. As an old school journalist, I find that really extremely worrying.

— In your book you’ve dug through a lot of the headlines, in terms of where claims are being made about bitcoin that actually aren’t true.

They’re categorically untrue. I’ll give you a really good example. Take my pal Patrick Byrne, the CEO and Chairman of Overstock.  About a year ago, he was saying he has no interest in cryptocurrencies or in bitcoin. Well, somebody convinced him that there were pockets of bitcoin all over the place that couldn’t be spent anywhere. So he said, let’s go after those pockets of bitcoin and sell them garden furniture. This was a marketing ploy.  He announced, “Overstock will accept bitcoins.” The press loved it. But Overstock wasn’t “accepting” bitcoins because every sale had to through Coinbase. What’s more, Patrick was smart enough to have negotiated with Coinbase that he wouldn’t have to pay a commission on the currency conversion. So “accepting” bitcoin didn’t cost him anything. The very first day he racked up $133,000 worth of bitcoin driven sales. It looked like he was supporting the bitcoin community, so the bitcoin community supported him. Within three months, however, his bitcoin-driven sales were down to $7,000 a day. Why? Because the people who had these pockets of bitcoin and no place to spend them, had spent them. And they didn’t buy back in. They saw no reason to buy any more bitcoins simply to use them to buy for pillow cases and garden furniture priced in dollars at Overstock. That’s significant. Think about it. How is there any logical reason for anybody to take dollars to buy bitcoins to pay for things priced in dollars? It adds no value and, in fact, creates extra expense. So, his sales dropped down to $7,000 a day. He then announced that he would accept bitcoin worldwide and his sales went up to $8,000 a day. But they have since fallen again. He has even said publicly, there is no international interest in bitcoin. None.

Shortly after admitting world wide disinterest, he filed a report with the SEC which received no media reporting whatsoever.  He’d decided to hold on to 10% of all his bitcoin sales. It means that Coinbase now converts 90% and sends him the remaining 10%. So he’s holding onto $700 a day worth of bitcoin business which he says he is giving to his staff as bonuses. By the way, the staff apparently insisted they put a bitcoin ATM in the lobby of the building in Utah so they could cash out right away. Now, on $7000 a day of bitcoin-driven sales, he’s saving his 3% Visa and Mastercard fees.  That’s $210. Okay, $210 a day times 365 adds up.  Except, he told the SEC that, in order to integrate the 10% he holds,  he must integrate $700 a day into his bookkeeping for tax purposes. That’s not so easy because bitcoin is considered property by the tax people, which means there are both capital gains and capital loss calculations on each bitcoin. So far for the privilege of keeping a few bitcoins on his books, he told the SEC, it has cost him $400,000.  Next, Patrick said in that SEC filing, he would probably have to spend another $400,000 to make his bookkeeping fully compatible. So, he’s spending $800,000 to save $210 a day. It will take him almost ten years to get his money back. Explain to me how this is a good idea, how this is sustainable, how this makes any sense at all.

— The Bitcoin community claim they have created money without government if they live within the Bitcoin system. What’s your reaction to this claim?

But you cannot live within the Bitcoin system. It’s impossible. Sure, you can buy bitcoins with your dollars and fool some people into thinking you’re living on bitcoins. But you’re not. To manage it, you need a circular flow of income, and with bitcoins, there is none. Every time you purchase something with bitcoins, as soon as the sellers of the goods and services turn it over to Coinbase or Bitpay to convert it back to dollars or pounds, each purchase becomes a sale of bitcoins. That way, no one’s holding this stuff.

Equally, when you look at the real statistics, you find that a lot of the numbers the Bitcion faithful claim as usage, are outright phony.  The faithful say there are 110,000 transactions a day, but only about a thousand of those transactions are for the buying and selling of goods and services. The rest are miners moving bitcoins between different wallets and address, and gambling. On top of that, there is what’s called “the change factor” which means each transaction gets counted twice. Next, the faithful say, there are eight million wallets. What they don’t tell you is that almost all of them are either empty or near-empty. In truth, Coinometrics at Cambridge says that fewer than 250,000 wallets hold one bitcoin or more. That’s not 250,000 people, that’s wallets, and most people have multiple wallets. Based on that, I am correct when I say, there are more people who are members of the Kuwait Airways frequent flier club than there are people on the planet holding bitcoins.

The faithful also say there are 80,000 to 100,000 businesses around the world that “accept” Bitcoin. But they don’t “accept” it.  Most of them never see any bitcoins and the few that do, mostly, don’t hold any. I called some of these businesses and asked, “Since you put a bitcoin button on your site, what’s  happened?” They said, “It’s a pain in the ass.  We’d much rather have somebody just give us cash, because what we have to do as soon as we get the bitcoins is sell them.  We don’t want them.”

Of the very few businesses I found that actually keep bitcoins, the one I liked the best is a guy who sells rodeo tickets in Texas. He said to me, “I put the bitcoin button on my site hoping that I’d get one or two, which I would save so that when I hit a million dollars of coins, I could retire. But I also play the lottery and that never comes in.” I asked, “How many purchases have you actually had with bitcoins?” He said, “None”.

The facts are the facts. No one is using this stuff. To that I add this undeniable fact: As a global economic phenomenon, bitcoin is a non-event.

The pretend currency is not working. Where people are saying bitcoin has a future, ask them to point to a bitcoin success. Nobody is saying, “Look at this, here is a huge success,” because there aren’t any. Instead, they point to the future. They say: “Just wait and see how bitcoin will end poverty by becoming a bank for the great unbanked.”

Huh? You and I both live in countries where there are unbanked, but they’re unbanked for various reasons. In some cases it’s cultural. There are ethnic communities that don’t want banks, that operate only in cash. There are also people who cannot afford banking and have to use payday lenders and cheque cashiers or things like that. But I cannot find a single case where bitcoin has actually saved any of those people, and this is in the developed world.  Not a one. In the United States, where there are 70 or 80 million unbanked, there is now a move by Bank of America and Walmart to go after these people and to get them credit, to bring them into the banking system. How do you expect three delusionals teenagers on bicycles, wearing t-shirts that say, “In thin air we trust”, to compete with Bank of America and Walmart? It’s not going to happen.

Also, in the States and in Britain and throughout the developed world, WiFi is cheap and readily available, and smartphones are readily available and cheap.  But the unbanked are still unbanked. Now look at the developing world where WiFi is expensive, where smartphones are not plentiful and where people have traditional, cultural, religious and political distrust of all sorts of things coming from the West. How are you going to sell these people on an invisible currency they can’t possibly use? They’re simply not going to buy into this.

On the other hand, a bank in Kenya and Vodafone, whom they know, are saying to them: “Look at M-PESA.  You can put that on your phone and move money.” They have sales and marketing forces. They understand the traditional, culture, religious and political mindset. Those three guys on their bicycle with the t-shirts are never ever going to compete with that.

— I still haven’t worked out your view between the idea that there’s a good technology here, which is going to play something useful for banks such as Ripple, which has centralized capabilities.

Or Eris. It’s the blockchain that is useful, and the blockchain needn’t have anything to do with bitcoin.

— Versus the Bitcoin guys who keep coming back at me and saying, “But it’s out there, it’s in the wild. We’ve got it, we don’t care about you.”

Except no one’s using it. Preston Byrne in Eris had a great quote the other day that I re-tweeted, because I think it’s the best quote ever about bitcoin: “A paradigm shift is not a paradigm shift if no one is using it.” That sums it up. The faithful always talk about bitcoin being disruptive. What they ignore, at their peril, is the fact that the disrupted will always be heard from.

— So you see this as a pretend currency, but it actually has a real technology, and your outlook for the future would be: this is a really useful thing?

No, no, no. Bitcoin is a pretend currency traded like a pretend commodity and pushed and pumped by a snake oil salesmen who have a self-interest in finding greater fools to buy it from them. Look at the Winklevoss twins and their Bitcoin ETF. These guys are grasping at straws to find greater fools to buy their bitcoins from them.  And they’re not alone. The problem with bitcoin the technology is that it is surrounded by the need to recruit the gullible in order to keep the game alive.

— What about the way in which bitcoin is used as a community currency, for crowdfunding for example?

Like the Elmer Gantrys of the old south, some of these evangelists are preaching: “Look at crowdsourcing and crowdfunding, and this will save you all.“ Andreas Antonopoulos testified before the Canadian Senate last fall, telling the committee on banking how wonderful Bitcoin was. I testified in January and spent most of my time debunking everything he said, explaining to the senators: “This guy is pulling the wool over your eyes.”  One of his misleading contentions was how bitcoin crowdsourcing was changing things for small businesses. The idea that you could have people from around the world collectively giving you two bitcoins so that you could do whatever business you needed to do with two borrowed bitcoins.  Again, the media just accepts this stuff, and they accepted his explanation. So I spoke to people who are borrowing crowd-sourced bitcoins, and spoke to people who are lending this stuff, and asked: “How does it work?” One guy in South America said to me: “It works great. I borrowed 1.1 bitcoin and I only paid 2% interest.” I said: “Gee, that isn’t bad. What was the term of the loan?” He said: “15 days.” I said: “Hold on a minute. You paid 2% interest for 15 days? Tony Soprano charges 2% for 15 days. That’s 48% a year. If you put it on your credit card, you can get it for 19% a year. You’re paying extortionate usury.” I then looked closely at the leading bitcoin crowdsourcing site, and they’re listing loans at 204% interest, and 305% interest and I even found one at 2,037% interest.

Short and simple, this is loan sharking. And there are laws against this. It is even possibly criminal for sites to aide and abet these loans. And it is definitely bad for business. What’s more, if you’re sitting in Britain and you crowdsource a guy in South America and he doesn’t pay you back, how do you collect on your loan? But, Antonopoulos sat in front of those Canadian senators and, with a straight face, told them: “It’s a wonderful thing.” It took me to say: “Look at the numbers, they don’t lie. He’s full of crap”. That’s what gets me about this. All of the spin and the misinformation and the hype, and the mainstream media is not doing its job debunking this.  They should be saying: “Let’s look closely”, because bitcoin cannot stand a close scrute. Because, frankly, when it comes to bitcoin, what you see is never what you get.

— In BitCon, you write about Mt.Gox and the guy who ran it, Mark Kerpeles, being such a geek that he wasn’t actually sustainable in his own world, let alone running billions of dollars of other people’s money.

Karpeles was a train wreck waiting to happen. And he was in Japan, which meant if you wanted to get your money back, you had to go there. Now, here’s Coinbase in the United States, run by a bunch of Americans. If something goes wrong, they’re easier to get to get. But how will you know until it happens because they don’t publish their books? They’ve just gotten a $75 million fill-up. Why? Because, I would suggest, they were in trouble and needed more money. There is a processor in Slovenia, run by two geeks. Are you telling me that you’re going to trust your money to anyone in Slovenia? This is crazy. There are no consumer protections.  There’s absolutely no guarantees in any of this.  And people say it’s wonderful. But it isn’t wonderful. It’s a minefield that’s fraught with problems, and it will come unglued because it simply cannot continue.

It’s not helped by the criminality that surrounds bitcoin. Not just Mt. Gox, but Ross Ulbricht – aka Dread Pirate Roberts – and his Silk Road conviction. Or Charlie Shrem, one of the original bitcoin stars, now doing time in federal prison for illegal activities with bitcoin. Or any of the other so-called “stars” who have previous criminal convictions. Or the fact that the champion of bitcoin, the Bitcoin Foundation, was near-bankrupt through alleged mismanagement and sheer stupidity.

As soon as the guys at Eris or Etherium or Ripple or any of the many other labs working on bitcoin-less blockchains get it right – by which I mean that they create a blockchain that deals in dollars and pounds and other currencies – that’s the end of bitcoin. It’s dead. That is when all the bitcoin processors in the United States or Slovenia will find themselves in an economic death-spiral because there won’t be enough action to sustain them. I’m not even convinced there’s enough action to sustain them for much longer, now. As soon as one of the VCs announces: “I just figured out a way we don’t need bitcoin”, it’s over. We’ve seen it before. Fads always disappear. Pet Rocks. Goo-Goo Dolls. The guy who invented pogs died the other day. His legacy is pogs. Satoshi’s legacy will be the concept of the blockchain, but the legacy of the pretend currency will be pogs.

— But what about the whole idea that it will become a centralised technology.  In fact, I don’t know if you saw it, but the Fed and IBM announced the other day that they’re working together on creating a dollar-based cryptocurrency that will be authorised and regulated and centralized.  Is that the way it’s going to go?

That’s right. That’s the future. Centralized. Closed. As soon as they work out payment systems in dollars, sterling and euros, bitcoin goes down in history like 8-track, semi-automatic transmissions and Pet.Com. The idea that everyone is going to use this pretend currency because it’s an alternative way of beating the central banks, is ludicrous. The faithful say: “Why would you believe in a central banker when you can believe in mathematics?” The answer is because mathematics alone and the algorithm alone, can’t run an economy. You need the central banker to run the economy. But, they say, central bankers inflate everything so that the value of your money is miniscule. They argue, if you’d put $100 under your mattress in 1913, today it would be worth $3. So what? I don’t know anybody who’s got 1913 dollars under their mattress.  And anybody who puts money under their mattress is a fool, because money invested can keep up, and often, beats inflation.

Inflation is built into the system specifically to avoid deflation. If you have a closed commodity economy, like bitcoin or like gold, the deflation you end up with is ten times worse than inflation. The bitcoin faithful want all the benefits of the gold standard without any of the problems attached to the gold standard. Look around. There isn’t a single country left on Earth that’s on the gold standard. And for good reason. The bitcoin faithful simply don’t understand the world economy. They don’t understand money. All they understand is their own self-interest. As one kid said to me: “When bitcoins hit $1 million dollars a coin, I’m going to be a multi-millionaire. I’m going to get rich.” Yeah, good luck.

— You seem rather anti-bitcoin.

I’m passionate about this stuff because it’s easy to see through it, and because nobody is asking the right questions. I see people come on CNBC and Fox Business, talking about the joys of bitcoin, and none of the journalists are doing their jobs by saying: “You’re full of crap”. They’re buying into this stuff and, when it all goes wrong, trust me, they will be the first to say: “We knew. We told you so.” There was a guy on CNBC that I openly challenged, who has a bitcoin credit card. He said: “You put bitcoins on your credit card and you can pay for anything with bitcoins. You go to Selfridges, John Lewis, a petrol station, and you pay in bitcoin. Isn’t that terrific?” No. It’s a con. It requires you to buy bitcoins with pounds or euros or dollars first, which is not only completely illogical but a really stupid thing to do. Why bother? Where’s the benefit? Just pay in pounds, euros or dollars. Why put bitcoins in the middle? Why add the cost when you’re getting no added value? Same thing with the bitcoin ATMs which, by the way, are mostly going broke. Bitcoin ATMs are proving to be non-profitable because (a) nobody’s using them, (b) the rent is too high and (c) the charges are too high.  They set their own exchange rate and they add a fee on top of it. There’s no reason to use them. The whole concept of bitcoin the pretend currency, is illogical. Yes, you can fool some of the people some of the time but you can’t fool all of the people all the time. Bitcoin the pretend currency will die on that.

— So it’s like The Emperor’s New Clothes? Eventually you see there’s nothing there?

That’s right. It’s become a cult. It’s become a religion. And I’m the heretic because I stand up and say: “This is crazy.” So they come after me. There are whole Reddit forums talking about the fact that I don’t understand anything. Vehemence, vengeance and juvenile temper tantrums show you the kinds of people who are involved in this, and you quickly understand that they can’t possibly sustain this because they truly are delusional. The rational ones are the VCs who are putting real money onto the blockchain to find practical business solutions to real problems. And none of those practical business solutions will involve bitcoin the currency.  None of them. Because bitcoin is a solution to a problem that doesn’t exist.

— And if I’m talking to you in about ten years, it’s hard to forecast these things, but do you think we’ll be looking back and saying, “Look at all these bitcoin fraudsters who have now disappeared, but didn’t they give us a great technology?”

But they’re not giving us a great technology. They’re pumping bitcoin, the pretend currency, which has nothing to do with the technology. Again, they’re self-interested. One of these clowns went on the record as saying: “Bitcoin has gone so viral, it is viral cubed.” The man needs to keep taking his meds because he’s just not in touch with reality. More recently, he’s claimed that bitcoin’s future is assured because the average life of a fiat currency is 27 years. In the next breath he recalled that Sterling has been around since the 17th century. Only people who want to believe the earth is flat buy into his absurdities. But then, without those flat-earthers, the pretend currency would become worthless. The point is that the blockchain will revolutionise things, but it won’t be the bitcoin blockchain. And it won’t take ten years. Five years from now, you and I will talk about bitcoin the way we talk about Edsel.

Excerpt from “THE HOTEL – Upstairs, Downstairs In A Secret World”

(c) Jeffrey Robinson 2014


When Lee and several other Embassy officials came to see the rooms and discuss specific requirements, Buckolt conducted the tour, which included a visit to the Royal Suite.

The grand staircase led up from the Front Hall to the mezzanine, where a smaller staircase — at the far end of the mezzanine — took them up to the first floor. There, in the corner of the building, double doors led into a pale green lobby.

Off to the left there was a dining room, also in shades of green, with a period English table large enough to seat 12. Straight ahead, another set of double doors opened into the large sitting room, in shades of light yellow, with a large salmon pink, plum red and pale green carpet. A large couch faced a coffee table and, beyond that, a working fireplace. There was a writing desk to the right and a beautiful, light wood grand piano in the corner to the left. Made by Broadwood and Sons in London in the nineteenth century, that piano once belonged to Richard D’Oyly Carte, the British theatrical producer who became famous for staging the operatic works of Messrs Gilbert and Sullivan.

Overstuffed armchairs were scattered around, with side tables next to them.

From the sitting room, an internal hallway led to the main bedroom. Running the length of the first floor, that inside hallway paralleled the main hallway so that anyone staying in the Royal Suite could interconnect with all of the rooms along the front of the Hotel. It created a totally secure area so that the guest in the Royal Suite never had to use the main hallway, except to enter or to leave the hotel.

Although the room numbers assigned to the Royal Suite were 112-114, they never appeared on any door. In fact, the Royal suite was the only room in the Hotel without numbers. But even if there had been 112-114 engraved on a small brass plaque in the middle of the front doors, that would have been misleading. At its smallest, this was a three room suite. But it was possible to turn it into six, eight, ten, twelve, twenty interconnected rooms.

The bathroom, set off the main bedroom, had that sturdy, old fashioned, white enamel look, with shiny gold taps on the basins. The bathtub was heavy, white cast-iron. At some point, very much as an afterthought, a shower had been fitted on, with a glass door that cut off half the tub from the rest of the room.

The main bedroom was surprisingly unspectacular, featuring an ordinary queen-sized bed. But then the list of people who had slept there was quite spectacular — from Nikita Khrushchev to Jackie Onassis, from the King of Morocco — who brought his own bed because he liked that one better — to Enrico Caruso, from Sophia Loren to Ronald Reagan.

Because the Royal Suite was the most special place in the Hotel — it cost £1200 a night for the minimum three-room configuration — not just anyone could have it.

Requests for it had to be put in writing to the General Manager. Anyone just ringing up and asking for it was invariably turned down, such as the man who phoned the Night Manager one morning at around 4:15. Refusing to identify himself, he told Adam Salter that he’d like to book the Royal Suite for the remainder of the night.

Without even checking to find out if it was available, Salter apologized that the suite was not available. “I’m terribly sorry, sir.”

“Listen, I’m really in a spot,” the man confided. “It’s only for the rest of the night.”

“Sir, I’m afraid the Hotel is fully booked.”

“If you knew who this was for, you’d change your mind. But I can’t say, you know, for security reasons.”

“I understand, sir, but there isn’t anything….”

“Let me put it this way…” The man dropped his voice to a whisper. “My client is an extremely famous pop star. We’re talking instantly recognizable, here. The thing is, he’s with a young lady… you understand, it’s not his wife… and anything you could do, you know, in the most discreet way possible, would be greatly appreciated.”

Admittedly, his interest was aroused. Yet Salter stood his ground. “I’m afraid it’s impossible, sir, perhaps another hotel….”

“Ah,” the man screamed, “to hell with you,” and slammed down the phone.

Salter never found out who the pop star was. But that wasn’t the point. This was not one of those “celebrity” hang-out hotels. Even when requests came in writing for the Royal Suite, they were refused to celebrities who might somehow detract from the quiet and discreet nature of the Hotel. For instance, they turned down Madonna when she asked for the Royal Suite. From actors to pop stars, from teen heart-throbs to heavyweight champions, the management turned down anyone whom they felt would create a crowd control situation that would inconvenience their regular guests.

One rare exception was Clint Eastwood.

When he arrived for his first visit, some years ago, the then General Manager — a Touzin predecessor — was notified by the front desk that a V-VIP had arrived.

The first V stood for “Very”.

The General Manager rushed out of his office to escort the film star personally to the Royal Suite.

“It is a real pleasure to have you with us, Mr. Eastwood,” he said. “And I would like you to know that my wife has read all your books.”

Kindle edition from Amazon US: Kindle edition from Amazon UK:

BitCon - The Book

by Izabella Kaminska

September 29, 2014
Part of the BitcoinMania series
(c) The Financial Times (Alphaville)


Jeffrey Robinson is an American author best known in media circles for his work on international financial crime via his 1995 book The Laundrymen.

Suffice to say, when one of the world’s best known financial-crime authors turns his attention to the world of cryptocurrencies, and in particular Bitcoin, it probably makes sense to pay attention. Especially when the book he publishes is called, BitCon: The Naked Truth About Bitcoin.

Sadly, for the Bitcoin faithful — as well as all the other reasonable institutions that seem to have been taken in — the verdict is not good. Robinson reduces the entire phenomenon to a classic swindle. A small cohort of ruthless predators taking advantage, as usual, of the naive and gullible via a carefully constructed and asymmetrical myth, which happens to appeal to those of a certain persuasion, encouraging them to take leave of their senses entirely.

Part of the fervour is driven by classic get-rich-quick sentiment, but the other and the more sinister part is based on the art of indoctrination, no different to that employed by cults focused on getting people to hand over their hard-earned cash for the the sake of reserving themselves a prime slot in heaven and/or the supposed system that comes after this one.

Most heinous, in Robinson’s assessment, is the fact that the predatory and cultic marketing spiel focuses on the message that “This time is different”, when an objective analysis of the evidence suggests nothing more than a common swindle that only really benefits shadowy non-contributors to the global economy.

Robinson quotes an array of respected authors, investors and academics who argue convincingly that Bitcoin “the currency” is Ponzi-esque to the Madoff level.

In fact, Robinson says, even the Austrian school academics, who Bitcoiners love to idolise, assess the phenomenon that way. Take the prognosis of Dr Gary North, economic historian and associated scholar of the Ludwig von Mises Institute, who has predicted “Bitcoins will go down in history as the most spectacular private Ponzi scheme in history. It will dwarf anything dreamed of by Bernard Madoff”.

Of course, the Bitcoin faithful don’t seem to view the Ponzi issue as a problem because they mistakenly believe the fiat currency they are displacing is no better and/or no worse. Worse than that they assume their Ponzi is transparent, and thus immune to the information asymmetry problem that plagues all other Ponzi schemes.

But, as Robinson notes, in the opinion of Mark Williams, former Federal Reserve Bank examiner — one of bitcoin’s most articulate skeptics and one of the top 10 most reviled men on the Bitcoin Foundation’s published “Most Reviled” list — the scheme is anything but transparent. It suffers not only from misinformation, but concentrated market power, hoarding, opaque and unregulated exchanges, insufficient trade reporting, elevated marketing hype and greater opportunities for market manipulation.

As Robinson observes, this is the domain of those suffering from apophenia, i.e. those who legitimise their belief by seeing meaningful patterns in random or meaningless data.

It can’t go on, Robinson argues, because the world eventually runs out of fools.

Unsurprisingly the Bitcoin faithful don’t like what Robinson has to say. In fact, most telling about the cultic nature of the whole phenomenon is that anyone making reasonable objections is set upon with ad hominem attacks full of hubristic “you’ll see when we take over the world” flavour.

The book, in any case, provides a good overview of why the economic thinking that drives the movement is toxic, as well as the twisted and malevolent forces at play.

As ever, Robinson begs us to consider, cui bono? Who does it all benefit? Guess what, it’s not the little guy. Those in prime beneficiary position are the dark and mysterious miners, anyone with illicit earnings to launder through the network, the intermediaries, the scammers, the PR industry propagating the brainwashing, the cottage industry of exchanges and even the big tech geniuses who have put their reputations on the line.

A key focus of the book is unravelling much of the misinformation that has come to dominate bitcoin coverage in the media — in large part due to the ferociously persistent nature of the PRs appointed by the movement. His biggest beef is with the notion that retail adoption is growing and that retailers are benefiting from the inclusion of bitcoin.

Robinson’s research suggests this is anything but the case. As he notes:

“In a totally unscientific, ad hoc study, I randomly phoned a couple of dozen small businesses in North America and Europe who were listed as “accepting” bitcoins.

They all had pretty much the same story. They put up their “Bitcoins Accepted Here” sign because it struck them as being a good marketing tool and, sure enough, several of them had very positive responses for a few days. If wasn’t necessarily a lot of money, but it was more than they had before they put up the sign. Then, their bitcoin takings all evaporated.”

Another interesting example of the distortion at play comes via his analysis of the Bitcoin Wikipedia page, which Robinson was directed to when one of The Faithful told him to “wise up to the truth” by reading up the Wikipedia entry, since it had been compiled by “thousands of people”.

From Robinson:

So I checked. Instead of thousands, it turned out to be a few dozen and, doubting them, Wikipedia had stopped publishing outside entries to the bitcoin listing. Why? Unsubstantiated entries and unreliable information.

All that said, all through the book Robinson separates bitcoin “the pretend currency” — which he sees as totally unnecessary and in no way revolutionary — from Bitcoin, the technology. Bitcoin the currency he notes is backed by the full faith and credit of wasted computer time. The technology, when not connected to currency, does possibly have potential.

He even refers to an exchange with tech billionaire Marc Andreessen, of “Bitcoin matters” editorial fame, in which Andreessen confirms he’s actually more interested in the power of the technology. (Though why then the $25m investment in Coinbase, the most notable of the payment processors currently bearing most of the bitcoin float risk, eh?)

But even on the technological side, there are issues due to the general complexity and cost associated with introducing digital asset systems. One of the book’s most interesting chapter, for example, discusses the lessons learned from the rise and fall of Canada’s MintChip initiative.

As Robinson explains the problem with MintChip — which was supposed to introduce the equivalent of a real digital state currency — was that it was simply too expensive for the public purse and MPs didn’t understand why the Mint was getting into the business of creating payment services, which to date had been successfully handled by the private sector. The private sector, meanwhile, had no interest in creating or supporting a system which competed with their own digital products directly.

Robinson interviews David Everett, the developer of the first electronic purse — a system called Mondex — who was brought in to the MintChip project. As he tells Robinson, had the Mint been prepared to bear the cost, the whole thing would worked really efficiently due to the simplicity. It all went wrong, he believes, because in the end people got confused about the difference between a real currency and a virtual one. This he notes, is down to the fact that not everyone understands cash or how the cash mechanism works. He suspects people got confused with MintChip and bitcoin, and started seeing the former as a virtual currency when that’s not what it was.

But as Everett notes, the reason why Mondex and MintChip had the potential to work while bitcoin will not is because they really were the equivalent to real currency. As Robinson quotes him saying:

“I think there are a lot of nice things in the bitcoin technology, but I don’t think it’s very good for cash. It doesn’t really lend itself to immediate payments. I’m surprised bitcoin has gone as far as it is.”

In other words, Bitcoin’s potential, if any, is as a publicly distributed and self-funded ledger of existing assets (but preferably not currency).

And really, this is only point with which we disagree with Robinson on. Yes, we agree, the idea of smart contracts is nifty, but we’re not sure the smartness of contracts is in any shape or form dependent on blockchain technology.

To the contrary, we suspect a lot of the “genius” of the blockchain lies in the way the system transfers the cost of clearing to users directly. It encourages people to police themselves rather than to rely on the services of a particular public or private authority of repute. The reason, consequently, why technologists and entrepreneurs love the “technology” (which is really a protocol) is because it allows them to build pyramids on the back of voluntary (instead of costly) slave labour.

To call this “technology” is consequently disingenuous. What it really amounts to is a persuasion technique focused on the roll out and adoption of a protocol on voluntary as opposed to compulsory terms, which — if constructed wisely — is supposed to help society order itself more prosperously.

This is no different to Moses persuading his followers that a world of self-discipline, as per the Ten Commandments, is better than a world without it. We don’t need Egyptian whips to build pyramids, we can discipline ourselves to achieve the same scale of growth.

Naturally, if society can be trusted to accept such commandments and live by them, the need for a supervisory agent (of the ancient Egyptian variety) can be eliminated.

But the question remains how can you be sure the public will comply with the rules that need to be followed by all if the system is to flourish?

The truth is, this usually depends on an innate payoff and penalty being built into the system. In religion, the reward for compliance is access to the kingdom of heaven while the penalty is eternity in hell. And not dissimilarly, with the Satoshi system, the reward for compliance is a step up on the social hierarchy of the system, while the penalty is the collapse of the system itself.

Remove such payoffs and penalties, and the incentive to cheat or ignore the protocol becomes too great.

What you end up with instead is a system that depends on constant public scrutiny to deter non-compliance. But this introduces not only an incentive to dodge the inspection of the crowd — opaqueness via off blockchain transactions –but also the corruption of the scrutinising crowd.

Which is why, for us, there is little sense in going from a system in which a single trusted intermediary of known repute (and which knows you) can verify what you are or are not entitled to, to a system in which you can’t partake even in a coffee transaction without the public at large judging that you have the right to the transaction.

That’s without pointing out the obvious: for a publicly distributed ledger to be a fair system you need the participation of the entire population at every transaction level. Yet the public is unlikely to have the time, the resources or the inclination to be bothered to participate to that scale. This leaves the judgment process open to the bias of participating judging agents.

We guess it all comes down to whether you prefer a system that uses a common entity that everyone knows and trusts to judge what you are entitled to, or a faceless crowd of unknown repute, with an unclear agenda.

For the first time as an eBook - THE MARGIN OF THE BULLS –


In 1970, an American calling himself Bay Radisson arrived in London with no place to live and no place to go back to. Twenty years later, he was riding the crest of a wave, as one of Britain’s brightest and most successful “risk takers.” With charm, cunning and humor, he and his partner had built themselves a minor empire – conquering gladiators in an arena where money was the only way to keep score.

But then Robert Maxwell dies, and that inadvertently sets off a chain of events that sends Bay’s world into a crashing nose-dive. Facing ruin, he finds himself caught in a ruthless battle against the establishment to save his life.

Set against the backdrop of the City of London, The Margin of the Bulls documents an era when the wheeling and dealing of the 1980s became the crimes of the 1990s.

“Disgracefully entertaining” – The Daily Mail

“Robinson has taken stories that the libel laws would not allow him to tell as non-fiction” – The Sunday Times

Amazon US: Amazon US:

Amazon UK:

These are stories the libel laws would never let me tell as non-fiction about the “Wild West” days in the City of London, when everyone was offshore and, for one American “risk taker,” Robert Maxwell’s death was just another excuse to make some money.

Excerpt (c) JeffreyRobinson 2014



“Ask where I am.”

“Paris, France.”

“That’s not a question, that’s an answer. Anyway, you’ll never guess, so I’ll tell you. Las Palmas.”

“What happened to Paris, France?”

“Her name is Helene.”

“That’s just a pansy way of calling someone Helen.”

“That’s right, Helene, as in, is this the visage that launched a thousand bateaux. She’s a Dior model, about nine feet tall, and I picked her up after a catwalk show yesterday. I told her I’d take her any place in the world that she wanted to go and she said. Las Palmas.”

“You offered to take a girl with legs up to her ass anywhere in the world and she chose the Canaries? How old is she, 15?”

“Older,” Peter insisted.

And then the two of us said, at exactly the same time, “But not much.”

We’d had this conversation a few million times before. “16?”

“Helene is not why I’m calling.”


“Almost 19, okay?”

“Almost 19? Does she know how almost old you are?”

“Listen, I’m not calling about Helene, I’m calling about Ro-bear.”

“Is that her convict brother or her motorcycle gang member boyfriend?”

“Ro-bear, as in Max-well.”

“You picked him up in Paris too?”

“No, but they’re about to pick him up not far from here. Like a few miles out to sea.”


“Ro-bear Max-well.”

“No, I mean, who’s picking him up?”

“I presume it’s the local version of the United States Coast Guard.”

I suggested, “Let’s start all over again. You and Ro-bear Max-well are working a Dior model who’s in the United States Coast Guard?”

“You want to make some money or not?” He said, “I’m in Las Palmas with this French bird, and the whole town is going crazy because Captain Bob isn’t here.”

“You’d have thought they’d be singing with joy.”

“I’m saying not here, as in not here, even though his boat is. He’s not on it. He’s missing.”

“Maxwell missing?” What a thought that was. “Where is he?”

“That’s what all those air-sea rescue guys in their nifty multicolored helicopters want to know.”

“You think he skipped? Is it summer in South America?”

“No, I think he fell overboard. That’s the rumor. I think he’s dead.”





While the Swiss financial industry continues to pretend that they welcome an agreement with the United States over foreign taxes, secret bank accounts for US citizens and FATCA, behind the scenes many Swiss are pushing for a national referendum on the issue.

The way the Swiss define their democracy, it’s not enough for parliament to agree and the Council of Ministers to sign on as well, the people have a say. A mere 50,000 signatures puts the issue to a national ballot. And here the stakes seem unusually high.

First there is the issue of Swiss neutrality — how to respond to a bullying US.

The argument goes, if America cannot collect enough taxes, why is that a Swiss problem? Just because Washington is trying to make it a Swiss problem, it clearly isn’t.

Then there is the principle at the very heart of the Swiss financial industry – secrecy. Not privacy, which is the softer word they put out as spin, but secrecy!

As a product, it outsells chocolates, cheese and cuckoo clocks, combined.

It is THE money spinner — not to mention, the platinum standard in hypocrisy — which has put Switzerland on the financial industry map.

Worth noting is that the last time the Swiss were asked, as a nation, to vote on ending Swiss banking secrecy, they said no by a factor of 3 x 1.

Will this time be any different? No.

Which is why so many Swiss bankers can happily pretend to be in favor a deal with the US, knowing that irate citizens will defend their right to secret banking. Publicly they say, we support an agreement with the Americans, all the time “investing” their money into the referendum to vote it down. But then, frankly, who can blame them for refusing to kill the goose the lays $2 Trillion eggs.

That’s where they’re going.





I was delighted to see that the original posting of two weeks ago, “My Problem with Bitcoins,” generated a lot of online and offline interest.

Because I wanted to know more, I showed up at last week’s “Inside Bitcoins” conference, in New York. A well attended MediaBistro event — with something like 300-350 Bitcoiners — I roamed the room asking questions.

It’s rare these days that I get to revert to my roots and play boy reporter.

Much of what I heard came as no surprise. Ever since I started asking questions about bitcoins, I’ve grown used to ad hominem attacks emotionally driven, nonsensical and illogical answers.

“You’re a currency denier.”

I don’t even know what that means.

And, “You don’t understand anything about Austrian economics.”

I understand it’s widely discredited.

And, “It’s math. That’s the algorithm’s setup. Like asking why believe “1/x” has dual asymptotes?”


I asked several people, if you cross a US border with more than $10,000 worth of bitcoins in your wallet, do you declare your “negotiable instrument” as required by US Customs?

Far too many of them looked baffled and shrugged, “No, why should we?”

I suggested, “Because that’s the law.”

That was waved off with, “Doesn’t apply to bitcoins.”

However, one man gave the game away by explaining, “There are different kinds of wallets, on purpose. Yes, if you are carrying your bitcoins in a wallet on your laptop or on your phone, then you have to declare them. But if the bitcoins are on another server, and you merely have electronic access to them on your laptop, then it is like an online bank account. In that case, you are not transporting negotiable instruments, you are transporting electronic access. That’s not declarable.”

Another thing I heard was, “Bitcoin exchanges are more regulated and more compliant than Western Union.”

While many of these exchanges — independent small businesses — try very hard to stay in bounds, it is not true that the industry is more regulated, or that they are more compliant, than Western Union. Yet, as more people say it, more followers repeat it.

Admittedly, I came to the conference suspicious of the “mining” aspect of bitcoins, which I’d previously compared it to a computer game.

The only reasonable explanation I got was from a fellow in the mining hardware business. He explained that every 10 minutes a new block of coins appeared. That “miners” were nothing more than a collection of people who linked their computers together to create hyper-computing power so that new bitcoins could be verified and, for their effort, one of the miners would win the bitcoins.

“A computer game,” I repeated.

“No,” he said, “more like the lottery. You buy a ticket, ie, the mining equipment, and the more you buy, the better your chances of winning a prize.”

So I stand corrected.

It’s Super Mario meets Powerball.

I’d expected to find a roomful of spotty 14 year olds. Instead, I found a roomful of former-spotty 14 year olds — now in their 20s — surrounded by the same enormous enthusiasm of true believers at a revivalist church.

The most fervent among them was the anarchist crowd. Not present in big numbers, they had the volume turned way up, especially during a panel discussion where they compared the right to purchase whatever they want with the First Amendment protected right of free speech.

Intellectually, it’s an interesting question.

The major credit card companies have stopped taking contributions to the WikiLeaks leader, Julian Assange, who remains holed-up in the Embassy of Ecuador in London. These people insist, supporting his cause by sending him bitcoins, is protected free speech.

Their argument then extended to sending bitcoins to various people in Iran — usually poets, dissidents and musicians — which is nonetheless a sanction’s violation. From there, free speech became using bitcoins to purchase otherwise illegal drugs for personal use on the website Silk Road.

Again, it’s an interesting intellectual exercise.

Where they lost me was in saying that they had a First Amendment right to pay for something described by the state as criminal — ie, drugs or pornography — as long as it was a victimless crime. I had to get off that train because none of them wanted to hear my opinion, that there is no such thing as a victimless crime.

Next, a refugee from Iran who’d sought safety in the US, received a round of applause for saying that people in Iran had more freedom of speech than anyone in the United States.

After that, another round of applause for a woman panelist who announced that she didn’t care about the Constitution, because the government was using it to deny us our rights and therefore, the Constitution didn’t matter.

The distinct tone of “them against us” united these people in their quest for world currency domination. The government can’t be trusted. Banks can’t be trusted. The NSA is listening in to all our phone calls and reading all our emails. “Fiat” currencies are doomed. We are the only answer.

My discomfort with that was shared by a man I’d describe as one of the few “adults” in the room. He worked in the financial industry and was, admittedly intrigued with the idea of digital currencies.

His response, “No one will take bitcoins seriously until this crowd marginalizes the anarchist fringe and starts acting like serious people.”

The single most interesting thing I discovered at the conference was the concept of the “two B’s.”

One speaker made it quite plain that when you talk about bitcoins, you have to differentiate between “capital B” Bitcoin, and “small b” bitcoin.

Small b is the currency.

Apparently, or at least according to the bitcoin crowd, small b is now accepted by more than 10,000 merchants around the world. None of them, however, seem to be on my block. And I live on a very big block. That should matter. Because none of the people I do business with accepts bitcoins, even if I could figure out how to mine them, what would I do with them?

Hearing that, one bitcoin stalwart Tweeted me, “You don’t have an Arby’s or Baskin Robbins or Burger King or McDonalds near you? They take #Bitcoin. You didn’t do your home work.”

In fact, he couldn’t be more wrong. I did my homework very well; there’s no Arby’s, B&R, BK or McDo anywhere near me; and NO! they do not accept bitcoins. In an effort to be deliberately misleading, this fellow was referring to a value added card product from a website called, which can be bought for bitcoins which, in turn, can be used at Burger King. (But not the other three.) So, yes, through an intermediary, and by paying middleman costs, you can indirectly buy a Double Whopper with bitcoins, even though, at the cash register, you will still be charged in dollars. Which is not the same as saying that any of those four fast food places accept bitcoins. He is dead wrong. They do not.

More interestingly, one fellow at Inside Bitcoins told a lovely story about how he’d received a panic email from a school group in Nigeria who’d crossed the border into another country and needed money to bribe officials in order to get home. Luckily he had bitcoins to send them, and thanks to his bitcoins they made it back safely.

I was glad that he was able to help them. But for the time being, I don’t expect to bribe any African officials, so I’m still at a loss.

Another disturbing aspect of the small b — at least for consumers — is that once a transaction has been made, it is irreversible.

No charge backs is one of their big selling points to merchants. But that’s not a big selling point for consumers. Pay for your widget with bitcoins, and you’re stuck with that widget. Doesn’t matter if it’s blue instead of yellow, arrives or doesn’t arrive, works or doesn’t work. The payment is final.

At least with credit cards, you can object to faulty goods or non-delivery and the credit card company will protect you by reversing the payment. What’s more, under many State laws, sales are not final until both parties agree that they are, or a lapse of time, such as 30 days. Which means irreversible bitcoin payments are not only anti-consumer, the no charge back factor may be a violation of specific consumer protection laws.

Once upon a time, cash was shells. And Manhattan was sold for $24 worth of junk jewelry. These days, most of us use less and less cash. So the concept of digital payments is one whose time has come. But then, at least for the foreseeable future, dollar bills and “Loonies” and euros and pound coins are universally recognized and accepted payment methods for goods and services.

What’s the selling point for bitcoins? The ability to move them anonymously, any time, to anyone, with as little as zero fees and no dependence on financial intermediaries? My question is, how many consumers really need that?

I suggest, most don’t.

Then there is the capital proper noun B.

That’s the technology behind the small b, and there is no doubt that it is fascinating.

Whether or not most people need this, the fact that you can move a currency around the world at almost no cost, and do it anonymously, has all sorts of applications that predict the future. But it strikes me that the future is the technology. And that the success of this technology merely assures the success of some form of digital currency, not necessarily bitcoins.

Here’s why.

Right now, there are as many as 50 digital and virtual currencies competing for the same minute market. And it is minute. One estimate bandied about at the conference was that there are about $1 billion worth of bitcoins in circulation around the world, as against $16 Trillion US Dollars.

Using that weight, bitcoin the currency doesn’t even have the same punch for punch as the non-convertible Cuban peso.

Many bitcoiners argue that this is only the beginning of the game for the small b. That it is the top half of the first inning. That acceptance will take time. What they don’t want to understand is that, the moment bitcoin gathers genuine momentum, the big kids on the block will move in and take over.

It may be a better mousetrap. But only until the mouse finds out.

The big kids will kill off small b bitcoins, not with regulations, but with capital B Bitcoin technology.

That technology is open code. It’s not protected. And if it works so well for bitcoins, it can be adapted and upgraded to work even better for anything. How about digital Facebook dollars? Or digital Google Sterling? Or digital Apple Euros? Or digital PayPal Every-Currency? The platforms are already there. Converting the technology to suit them will happen when it is economically feasible for the big kids to own it.

And they will.

Never going to happen, the bitcoiners insist.

But that’s only because most of them are too young to remember semi-automatic transmissions, floppy disks, 8-Track and Betamax.


© Jeffrey Robinson 2013



When the Europeans invented the Euro, the first thing they did was make certain that everybody could easily exchange their francs, Deutschmarks, lira and pesetas; and, get their hands on them; and, use them freely wherever they wanted.

When some anonymous guy invented Bitcoins, the first thing the folks behind this digital currency did was come up with some convoluted story about mining the coins; then assure everyone that this would be a world currency without governments, which means that transactions would be hidden from authorities; then go into all sorts of trials and tribulations about how you could speculate with them (ie, the Winklevoss brothers are buying into the concept so this proves Bitcoins are here to stay); and added, for good measure, that they were ideal for supporting Wikileaks, and since then, Edward Snowden.

Any wonder I have problems with Bitcoins?

To begin with, if this legit, and such a major advancement in the digitalization of the planet, how come the guy who invented Bitcoins is still anonymous? I’ve heard all the answers, and his modesty aside, none of them make sense to me.

Furthermore, speaking of not making sense to me, there is the explanation of how Bitcoins must be mined.

The business reeks of a bad-video game for acned geeks. Except that there appears to be huge sums involved. I say “appears” because, who knows? The Bitcoin Foundation talks about a finite number of Bitcoins. That’s their story. Why should anybody take their word for it? A lot of Bitcoin’s self-proclaimed credibility seems to stem from their own press releases proclaiming a rosy future, feature stories that say this could work — with lots of added “ifs” — and indignant responses to criticism. Stay tuned to what follows this.

Another thing that worries me is the old adage, if it can’t be explained in a simple sentence, don’t believe it? The story of the algorithms behind Bitcoins, why they’re mined and how you mine them disquiets me. I can’t help but think of a similarly tortuous and (deliberately?) confusing explanation given by Bernie Madoff when asked how he could guarantee huge returns in the face of a terrible market.

After years of investigating and writing about subjects like fraud, when I hear a long-winded, overly complex explanation of how something is guaranteed to work, and it doesn’t make sense to me, I ask myself, “Cui bono?” Who wins?

One answer this time is, obviously, the people selling the concept.

But is it snake oil?

With Bitcoin prices all over the place — to the point of looking, at times, worryingly unstable — it’s clear that some speculators are cleaning up.

But how about the people buying Bitcoins to use?

Like elixirs that grow hair, prevent appendicitis and keep alligators away, I have serious doubts. You can only use Bitcoins in very very limited ways. (Latest success – a washing machine that accepts Bitcoins.) Ah, they say, world domination is coming. Yeah, so is Christmas. Try tipping a New York cabbie with a Bitcoin. He’ll tell you what they’re worth.

As for the selling point of total anonymity, here too, I ask myself “Cui bono?” Who needs totally anonymous transactions? Not private transactions, but totally anonymous transactions? In reality, very few people.

There may be legitimate reasons for doing invisible business, but I can’t think of many. That said, the recent Liberty Reserve fiasco revealed a long list of clients for similar digital currencies. Among them, money launderers, drug traffickers, buyers and sellers of kiddie porn, arms dealers and terror funders.

Interestingly enough, in recent interviews with federal law enforcement officers — research for a new book on dirty money — they told me they haven’t seen Bitcoins showing up regularly in terrorism investigations. Hardly an endorsement, that says to me that even terrorists — who are always looking for the latest ways to move money anonymously — have doubts about Bitcoins.

Having written about dirty money extensively for the past 20 years (The Laundrymen, The Merger, The Sink and The Takedown; plus countless articles about it in magazines and newspapers; plus frequent comments about it on television; plus hundreds of speeches on dirty money) I ask that you forgive me for being innately cynical.

But, if you Google the latest news stories about Bitcoins, what do you find? Dozens of links to mining Bitcoins, dozens more to speculating in Bitcoins and plenty about the turbulent nature of their value. What you don’t find are stories about the biggest retailers on the planet accepting them.

Which leads me to wonder, how long will they last?

There have been alternative currencies before. In a sense, the first credit cards were that. So are American Express Travelers Checks. But they’re all backed by bricks, mortar and negotiable reserves. There has never been an alternative currency based on thin air and so shrouded in mystery and doubletalk, that has survived.

Instead, there have been tulips.

Go back to the 1600s when the world went crazy for tulips.

Their sudden and wide-spread popularity was inexplicable. Merchants, shopkeepers and investors couldn’t get enough of them. Prices went crazy, to the point of being preposterous.

A classic case study, Tulipmania took Europe by storm.

By 1636, so many people were speculating in — and gambling on — tulips that they were traded on Amsterdam’s Stock Exchange. That same year, they also showed up on the London Stock Exchange

Huge fortunes were made, the likes of which had never been seen before, and people everywhere were insisting that this would last forever.

Then, one day, just like that, it didn’t.

Do I see a difference between Bitcoin-mania and Tulipmania?

Absolutely. You can put tulips in a vase and admire them.



Towards the end of 2012, a Bulgarian appeals court overturned money laundering convictions for six Bulgarians, including industrialist Mario Nikolov. In other parts of Europe, the trial had been seen as a test of Sofia's will to fight fraud and money laundering.

Seems that the Bulgarians failed.

In its 2012 report on money laundering around the world, the US State Department highlighted the dangers of Bulgaria:

"Bulgaria’s developing financial sector, large underground economy, prevalent use of cash transactions and lack of effective enforcement combine to make Bulgaria vulnerable to money laundering. The main sources of laundered money in 2011 were derived from domestic and foreign criminals engaging in drug trafficking, smuggling, human trafficking, tax fraud, credit card fraud, and increasingly, internet fraud. Bulgaria is a major transit point for the trafficking of drugs and persons into Western Europe. Corruption remains a serious problem and many still associate public tenders with kickbacks and money laundering. Financial crimes enforcement capacity is limited. The authorities opt for easy-to-prove, low-level corruption and related money laundering cases. As a result, progress on cases of high public interest, involving alleged siphoning of millions of taxpayer money, such as the public procurement of big energy infrastructure projects, have not generally been pursued."

The State Department pointed out, "Bulgaria is a transit country for heroin, as well as a minor producer of illicit synthetic narcotics," then added that the country was, "a source and, to a lesser extent, a transit and destination country for women and children who are subjected to sex trafficking, and men, women, and children subjected to conditions of forced labor. "

More recently, the Bulgarian police, aided by American agents from the  DEA, busted a $5 million international money laundering ring operating out of Sofia, leading many to suggest that Bulgaria is a new player worth watching on the money laundering scene.

Worth watching? Yes. But not because Bulgaria is a new player on the scene. Because it's one of the oldest.

This is an extract from the original publication of The Laundrymen, nearly 20 years ago.



The UN embargo in the former-Yugoslavia turned Bulgaria’s organized gangs into the nation’s most successful entrepreneurs. Sanction busting was rife and with it came money laundering. According to the Ministry of the Interior, Bulgaria is today in the throes of its worst crime epidemic this century.

When the government in Sofia announced that it would sell off 1600 previously state owned industries, it explained that, unlike similar sales in other former Communist countries, they would not be accepting scrip or vouchers, they would be selling everything for cash. Informed by European and American advisers that such a sell-off would be a field day for money launderers, the Bulgarians said they would prevent anyone from doing that by asking all investors to declare the origin of their funds, as if a Colombian drug dealer would admit that he was buying Balkan Airlines with $50 million worth of crack receipts!

For the record, the Bulgarians were one of the first Eastern bloc countries to comprehend the advantages of money laundering. Under 35 year regime of Todor Zhivkov, from 1954 to 1989, the government dealt drugs, washed the profits through shell companies that had access to Swiss banks, and then used that money to finance a major international illicit arms business.

Zhivkov's trading outlet was the state-owned import-export company, Kintex. Set up in 1968, it was operated exclusively by the KDS, the Bulgarian Security Service. It sold heroin and morphine base to Turkish drug traffickers and with that money was able to build up its gun running. Kintex became so adept at converting drugs into weapons that it furnished the Nigerians with guns to put down the Biafra civil war in the 1960s; it furnished various Christian militias with guns to escalate the civil war in Lebanon in 1975; it furnished South Africa with guns in direct violation of various embargoes; and, for more than 20 years, it was the primary outfitter of guns to the PLO. For their efforts, the Bulgarians reputedly earned up to $2 billion a year in much-needed hard currency.

The extent of Kintex's The UN embargo in the former-Yugoslavia turned Bulgaria’s organized gangs into the nation’s most successful entrepreneurs. Sanction busting was rife and with it came money laundering. According to the Ministry of the Interior, Bulgaria is today in the throes of its worst crime epidemic this century.

When the government in Sofia announced that it would sell off 1600 previously state owned industries, it explained that, unlike similar sales in other former Communist countries, they would not be accepting scrip or vouchers, they would be selling everything for cash. Informed by European and American advisers that such a sell-off would be a field day for money launderers, the Bulgarians said they would prevent anyone from doing that by asking all investors to declare the origin of their funds, as if a Colombian drug dealer would admit that he was buying Balkan Airlines with $50 million worth of crack receipts!

For the record, the Bulgarians were one of the first Eastern bloc countries to comprehend the advantages of money laundering. Under 35 year regime of Todor Zhivkov, from 1954 to 1989, the government dealt drugs, washed the profits through shell companies that had access to Swiss banks, and then used that money to finance a major international illicit arms business.

Zhivkov's trading outlet was the state-owned import-export company, Kintex. Set up in 1968, it was operated exclusively by the KDS, the Bulgarian Security Service. It sold heroin and morphine base to Turkish drug traffickers and with that money was able to build up its gun running. Kintex became so adept at converting drugs into weapons that it furnished the Nigerians with guns to put down the Biafra civil war in the 1960s; it furnished various Christian militias with guns to escalate the civil war in Lebanon in 1975; it furnished South Africa with guns in direct violation of various embargoes; and, for more than 20 years, it was the primary outfitter of guns to the PLO. For their efforts, the Bulgarians reputedly earned up to $2 billion a year in much-needed hard currency.

The extent of Kintex's connections with organized crime in the West came to light only in the early 1980s. Italian police raided a Mafia drug refinery in Trapani Province, on the western tip of Sicily, and uncovered a laboratory that, to their surprise, was stocked with Bulgarian machinery and Bulgarian-supplied morphine base. This one lab alone was capable of producing a staggering 4.5 tons of refined heroin per year. At wholesale prices, in those days, that represented $1.125 billion. Over the next few years, no fewer than 15 refineries were uncovered in Sicily and on the Italian mainland, most of them with Bulgarian supplies.

By this time, the CIA had plenty of evidence to prove Kintex's role in international drug trafficking. When the Reagan administration formally protested, Zhivkov cracked down on every amateur drug dealer in the country. Largely to placate Washington, tons of marijuana were seized and assurances were given that the business had been ended. But Kintex continued to trade. Five years later, as a result of continued American protests, Kintex finally became too much of an embarrassment. So, for all intents and purposes, Zhivkov put Kintex out of business. In its place he installed son-of-Kintex, a state-owned import-export company called Globus. But the KDS was still in charge and its primary mission was still drug trafficking, arms dealing and money laundering. In effect, the only change was the company stationery.


excerpt from The Laundrymen (c) Jeffrey Robinson, 2008 Now available as an eBook: Kindle (US): Kindle (UK):    

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