Tag Archives: US

March 12, 2014 · 17:18

Who runs America?

This is a question that has been in the back of my mind for some time. When we consider the economic events from 2008 onwards and how slow (almost 2 administrations) it has taken for any economic legislation to take shape for the (at present) ineffective halting of moving tax dollars off shore. Even now, several economic boffins are slowly and casually mentioning that current measures are not going far enough.

The entire issue took a new foothold as we see the Ukrainian events unfold. We see how some politicians are acting so….outspokenly against certain acts. Now, I am not speaking out against these people, I believe in the freedom of speech and as such, we need to hear all sides. The issue was shown the most visible in the UK when some stated on how economic sanctions against Russia would be taken, like getting gas from a different source.

It was at that point when I saw just how hollow their boasts were. In my view those politicians would soon be dragged to a separate room where several high powered industrials would add these politicians to the Christian choir of ‘Mare Castratum’, see this as a slightly more efficient form of gagging a politician.

Why this view?

Consider that politicians would make that rash decision and also consider the fact that in the UK (amongst most EEC nations), the energy prices are way above normal. So in a place where like the US, 1 in 7 lives below the poverty line, where these people can hardly pay their bills, get confronted with a 10%-15% raise on energy bills. What do you expect to happen?

I expect something similar to happen in the US, as I see it there are two elements in play here. The first is the claim (at http://www.skynews.com.au/world/article.aspx?id=957624)

The two quotes are “The Senate on Tuesday expressed its support for Ukraine by passing strongly worded resolutions, using tough language against Russia and urging it be suspended from the Group of 8 world powers.” and “The House of Representatives also passed a resolution to condemn what House Speaker John Boehner called ‘Russia’s hostile acts of aggression’”

I understand the second quote and I reckon that House Speaker John Boehner was quite correct to pass such a resolution. It is the first one that is an issue, I understand that governments want to stand in support of the Ukraine, there is no way that any objection to that is valid, consider however what the G8 stands for. If we accept the following ‘G8 nations comprise 50.1% of 2012 global nominal GDP‘, then without Russia, will the G8 be a valid office of existence and what to do to keep its validity? Replace it with China?

That part would make sense as in many ways, the Chinese economy would be much more interesting to America then Russia is for the mere fact that China imports almost 3 times more than Russia does (based on 2012 numbers). Yet, if this happens, then what will be the long term consequences? Consider that the Ukraine is in an even less prosperous situation then most EEC countries. Now consider the information (at http://www.forbes.com/sites/kenrapoza/2014/03/05/in-ukraine-crisis-russias-natural-gas-tactics-could-backfire/), basically the Ukraine was getting gas at a 36% discount. If that fell away, then what will the Ukraine do? The quote seen here “The UK National Balancing Point (NBP) futures for natural gas jumped nearly 10% to $10.28 per MMBtu, according to Bloomberg. Prices have since moderated as the political situation appears to be calming down” gives validity to my claims of the energy prices; if futures would take that must a blast, then I reckon the people could face a charge at nearly twice that percentage. There was a side in all this that I had not reckoned on. When we see the quote “The U.S. wants to become a large LNG exporter later this decade and a portion of that would be bound for Europe” we see two dangers. The first is that this is not just government, but this is definitely a ‘Big Business’ push. Yet, consider the amount of customers could be the issue as the amount needed would far outstrip what could be delivered. That part is implied in the Dutch article (at https://decorrespondent.nl/299/eerst-het-gas-dan-de-moraal/32952491-c7e501ab) called ‘Eerst het gas, dan de moraal‘, which could be loosely translated and paraphrased as: “Business before morality“, which is basically at the heart of all these events. The article states that the Russian pipeline is supplying well over 26 million households, which is well over twice the size of California (in households). There should be no illusions that Gazprom has its powerful claws firmly in the EEC.

Let’s make sure that I am not stating that the politicians are acting purely or mostly out of economic reasons. I am to a lesser extent implying that it is possible that the Natural Gas lobbyists in Washington have been speaking with politicians over a lunch or two (which is how things are done in the US and UK). That latter part was discussed in the Guardian in October 2013, as UK Labour leader Ed Miliband mentioned that these lobby groups are not getting the proper levels of scrutiny (at http://www.theguardian.com/politics/2013/oct/07/energy-firm-lobbyists-scrutiny-ed-miliband). So it is IMHO Big Business that is the second danger element in these cases. If the politicians represent the people, yet big business has the funds, ability and know-how to override the views of the people, then what use are the people at the end of all this?

This all goes a few steps further than just the energy groups. I started all this with a mention of economic sanctions. So how does this connect? Well, it does not directly connect, yet the elements all have their political influence. Consider the needs of Apple in Russia (at http://appleinsider.com/articles/14/03/07/russias-megafon-deal-with-apple-inc-guarantees-sales-of-750k-iphones-over-3-years). This was less than a week ago. So we consider the value of a little over 20,000 iPhones a month for the next three years and we should expect that this sparks the sale of iPad and iPod and other Apple articles. Do you think that the members in charge of Apple are hindered by morality? They have parked billions in taxable dollars away from the collecting hands of the IRS (and other taxing governments). The commission these people get from their deals in Russia will not stop them in any way. Whether there will be some ‘illusive’ distributor in India, Japan or China will not matter, the show (read sale) will go on. The same could be said for Dell. You think that they stop selling to Russia and leave their market share to ASUS? I think not! These are just two examples of the dozens of massively large companies doing business with Russian one form or another, not just from the USA, but also from Europe. In that same regard, there is not export without import, so as we see the boasts of economic sanctions to Russia by politicians, remember that when we see that when Russians show off their latest Apple gadgets on TV, the question ‘who runs America?‘ should remain firmly on your mind. In the end you should also remember that the entire situation is a lot more complex then I make it out to be.

As we focus on ‘Business before Morality‘ then remember the bills most of you have in your drawer still awaiting payment. We are nearly all of us overdue to the smallest or a larger extent and as some are more fortunate not to be one of the seven people living below poverty, consider that most of us are in the same place where 45% of us are, most of these people are all a little below getting by, which comes down to one step from a total nightmare life.

I am not stating it is a good place or an acceptable place; it is merely a realistic place. It is in this realistic place the question gets the volume it needs to have: ‘Who runs America?‘

 

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December 26, 2013 · 21:55

What Syrian option is there?

It all started with the Tweet from Janet Royall, who is the current UK Labour leader in the House of Lords. The tweet was a link towards this article (at http://www.independent.co.uk/news/uk/politics/no-room-at-the-inn-britain-says-no-to-syrias-refugees-9025265.html).

I do not agree!

We know that something must be done, but this is not the solution. Which of the 10,000 would the UK help when the numbers of refugees are up there in the 2 million at this point! A solution must be found. Yes, I do agree that it always looks good when politicians are seen with those few people (especially children), when those people are truly happy to get out of harm’s way. It looks at times like the impoverished approach in getting votes (sorry for the cynicism).

The issue is a lot larger and a lot more drastic then many realise. At UNHCR (at http://data.unhcr.org/syrianrefugees/regional.php) we see that the number is well over 2.2 million, so when we see that the Netherlands was not about accepting refugees, but to send aid in all forms, then they would be right and the UK should do the same thing.

The massive dangers at present are Jordan with 569K refugees and Lebanon with 851K refugees. You see, they are now danger places as resources are dwindling down over there. If something is to be done, then it will be imperative that as soon as possible an additional 20 containers measuring 40′ filled with food and medication goes tho these two places EACH DAY! (Not sure how much is send at this time) In addition, Jordan has always had a water shortage to some degree and another 569 thousand thirsty throats (which is an additional 10% of the population) are not helping any. This for the simple reason because if you think that things are bad now, wait until the local population notices the drop in fresh water. Then gooses will be cooked on several borders. So as the independent is happily voicing Shadow Home secretary Yvette Cooper, they did mention in a blasé one-liner “Ministers say the UK is helping more than one million of the estimated 2.4 million refugees in what the UN views as the biggest emergency in its history.” But it was all about the Labour side (as I read it).

The Conservative’s way is exactly the approach that is needed from several nations and the UK is seeing financial support from the Netherlands. More funds will be needed!

So this is not just about where refugees go, but where can support and aid be given the best? To move these people to Europe is not really a solution (perhaps just a short term one). We heard the US talking tough, but at present they seem to remain in the distance in regards to achieving anything to resolve the situation. It must however be said that they did send aid which seems to be well over $100 million at present, so they are doing their bit in this instance, but as the big power, a solution should have been found ending this bloody civil war a long time ago, which is not the case.

This is not the fault of the US, because Russia is part of this entire caper and as such, Russia has been less than forthcoming in any solution. I do not think any refugees made it to Russia to begin with (not the best climate to go to either).

Even the Israeli’s have been sending aid, support and medical assistance!

No matter how we turn the dice, a choice must be made, one that other nations can consider, or even accept. So what could we do? No matter what solution we choose, it should include moving people away from both Lebanon and Jordan before this all escalates further and we end up with not one, but three countries that will be in dire need of aid and support. My first choice would be Egypt, this because there is so much space beyond Cairo and Alexandria. If these refugees can start building something for themselves in the meantime, like farms and work them, they will have means and perhaps even options for a future. There are even optional possibilities when we see part of the Sinai desert, especially when we consider how Sharm-El-Sheik has grown into a tourist haven, perhaps it can grow into something more?

Perhaps that will not work, it might just be a real bad idea I am having, but in my mind, moving a population of this magnitude will not work, splitting them up over nations might seem like a short term solution, but in the end it will cost and cost and never be the solution it need to be, so finding a middle-eastern solution and making sure that essential resources make it there might work and it would help many more than just a few thousand getting placed in the UK.

What is the best option? Not sure, but the UNHCR currently seems to be at a loss as well and they are supposed to be the experts in this field.

 

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December 23, 2013 · 22:44

Questions at this time

I have been fighting with myself in regards to certain issues that have been rising in this day and age. When we look at the definition of treason we see this statement “In law, treason is the crime that covers some of the more extreme acts against one’s sovereign or nation.”

The question is not just in regards to a nation as is the case with Edward Snowden, but what about the acts against the people? If we accept the following statement as an acceptable fact “Republicanism is the ideology of governing a society or state as a republic, where the head of state is a representative of the people who hold popular sovereignty rather than the people being subjects of the head of state.”

So, if that is true, then should we consider the acts or even the absence of acts that stops dangers to the people as an act of treason? I have written about some of these parts for some time now, as per 5 days ago the guardian is now a little more vocal about it (at http://www.theguardian.com/global-development/2013/dec/18/rich-countries-money-laundering-tax-evasion-oecd)

It seems that governments are FINALLY getting on the horse of action (as seen at http://www.reuters.com/article/2013/12/20/us-usa-tax-fatca-idUSBRE9BI13J20131220). Yet it seems that larger tax holes are still in existence in Ireland (at http://www.reuters.com/article/2013/10/15/us-ireland-tax-idUSBRE99E0PD20131015)

So should tax evasion be seen as a form of treason? I am not talking about the people left right and centre trying to find every possible tax hole. I am talking about the large corporations and their boards of directors (at http://www.businessspectator.com.au/article/2013/7/15/social-media/looking-beyond-apples-tax-evasion-tactics). If we accept the quote “Taxed at 0.004 per cent“, then how un-national (or in this case un-American) should these people be regarded? And it goes far beyond that part. This is shown in http://www.bloomberg.com/news/2013-01-23/yahoo-dell-swell-netherlands-13-trillion-tax-haven.html as we see a glimpse of the size of evasion. It is nice to see that the Netherlands are getting of the tax evasion horse, but consider this article from the Guardian (at http://www.theguardian.com/business/2011/oct/19/tax-avoidance-in-netherlands-becomes-focus-of-campaigners) shows that this horse had a very comfortable 3 years. Simon Goodley and Dan Milmo from The Guardian reported all this in October 2011, if we consider that then the words of President Obama sound even more hollow when we read “President Barack Obama presented a series of proposals in 2009 to curb offshore tax benefits“. Hollow? Yes, because only now at the end of his second reign is he making an effort, making it clear that keeping rich friends near you is all about re-election. So, when the hard times hit in the next term he can point the finger at the Republicans. The idea that we hold large corporation’s tax accountable does not seem such an option for either administration (Democrats and Republicans alike).

So, after all these years, as the US is getting in a financial state more and more desperate actions are finally taken, which in my view is well over half a decade too late. The issue remains, as people are hit harder and harder for taxation, not just in the US, big business seems to escape their share of taxation, giving them a massive advantage. In addition, in what I would call the ‘incestual’ relationship between a board of directors and their ‘ability’ to avoid taxation on a borderline of actual fraud (example HSBC to name but one). The game does change when we read that governments themselves start to offer assistance in this field (at http://www.cbc.ca/news/politics/jim-love-canadian-mint-chairman-helped-run-offshore-tax-avoidance-scheme-for-clients-1.2441347)

So, as we go towards Christmas and those high and mighty people do their ‘charity’ thing, then also consider that it is not impossible that they have been paying less taxation (like in +18% less), how very adult adults!

So if you want to cheer for anyone, cheer for that 60+ person, who after getting cut on life, living standards and retirement funds, this person is still doing over 20 hours a week in a community centre getting it all done for the people in their neighbourhood, because that is true charity and one more noble then I could actually muster at present.

If we get back to Republicanism, if it was all about ‘representing the people’ and consider that the fat cats are the chosen few (like 100,000 in a nation of 325,000,000), are these acts of non-accounting a form of treason too? Especially as tax evasion leaves a nation in a state of destitution? America seems to be clear evidence of that as its total debt will be roughly $60,680,485,000,000 on Christmas evening. Still think delaying acts against tax evasion was ever a good idea?

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December 4, 2013 · 09:54

Debt and …?

This is a story I find hard to write. Is it a story? That will always depend on your point of view. You see, there is a danger to blindly sight with one person, one group or one vision. We all have it. We think of a certain path being the only one and as such treading of that beaten path is always a dangerous one because we as people do not walk off the path. Some know the horrors that this beaten path protects us from.

This is the story of Israel and an ally, who due to impending bankruptcy had to make a leap of faith. This is how I see the Iran issue. Let me be clear. I have nothing against Iranians. I remain in the belief that Ahmadinejad was an utter idiot and as such no trust could go to Iran. The image of its current President Hassan Rouhani is entirely different, yet, I still have an issue with the dangers to Israel. No matter how good Rouhani is. He will be up for re-election and after two terms, what will Iran get? Will it get another Ahmadinejad? Until the Muslim nations all acknowledges the existence of the state of Israel, giving them nuclear abilities is just too dangerous in many cases. In my mind Ahmadinejad wanted immortality, to be remembered in prayer for all eternity. To get that, he only needed to destroy Israel, something that could be achieved with only one successful nuclear missile strikes. Would Ahmadinejad do this, if he had nuclear abilities during his reign? In a heartbeat! Now, I am fully aware that most Muslims are not like this. But it only takes one elected one to take that step. This is a very real danger! So, I personally do not expect that Hassan Rouhani is like that at all (it is just the image I have of that man). But if we consider that to be elected in Iran, that three of several elements are: administrative capacity and resourcefulness, a good past record, trustworthiness and piety. If Ahmadinejad passed these, then who else will be able to pass these checkpoints?

So what is this about debt?

Well, the US has too much of it and it needs billions each day to stay afloat because the US cannot get a grip on its spending. With an oil filled Iran, the US will be willing to do business and it desperately needs money! If you doubt that reasoning, then consider the Cuban issue. Why after decades is there still so much pressure, both economically and technologically? Consider this pdf from the US military: “Policy Options for a Cuban Spring” (at http://usacac.army.mil/CAC2/MilitaryReview/Archives/English/MilitaryReview_20120630_art014.pdf)

I wonder if this stand-off approach would be there if there were large oil fields under Cuba. A Cuban response, even though I find it slightly too ‘propagandistic’ (is that a real word?) is at http://www.cuba.cu/gobierno/alarcon-tvi.html, where it states as they quoted US senator Warner “The current policy treats Cuba more cruelly than Iraq and North Korea, where US embargoes are less restrictive.” I cannot vouch whether that was said, whether that person quoted it, but there seems to be a ring of truth in the sentence. It seems that Iran still supports Hamas, a known terrorist organisation, but as this endangers Israel and not the United States, the US will deal with Iran. So, is this an act of betrayal against its long term ally Israel? That depends on several matters, but that is how many would see it. That view is endorsed even more if we consider that Cuba is still under the heaviest of sanctions.

So is the US being sanctimonious? Considering the pressures that remain it does look that way. Whatever you think of the Cuban regime that is in place. It has been there for 50 years. So, the approach of half a century that did not work has to change. There are additional questions. This quote gives one view “Human rights advocacy groups have criticized Castro’s administration for committing human rights abuses. Human Rights Watch stated that his government constructed a ‘repressive machinery’ which deprived Cubans of their ‘basic rights’ “. Another view could be that the US had strangled Cuban Economy for half a century and as such certain developments could never take place. It is possible that my view is the wrong one, yet as we see how the pressure on Iran is now faltering, where they endured economic sanctions less than half the time Cuba had, additional questions must be asked. Israel has been placed in a dangerous situation and I wonder what promises John Kerry will make on his visit when serious questions will be asked of him. I wonder if the Cuban situation will enter the discussion at some point.

As for my added label of ‘sanctimonious’?

Consider that the US Tax evasion law (FATCA) which was initially supposed to start in January 2013, has now been delayed until July 2014. There is an interesting read (at http://www.deloitte.com/assets/dcom-unitedstates/local%20assets/documents/tax/us_tax_fatca_faqs_061711.pdf). So as Reuters reported another delay (at http://www.reuters.com/article/2013/10/29/usa-tax-fatca-idUSL1N0IJ1N020131029) the question becomes, who does the US government serve? More and more evidence comes to light that it is not all US citizens, but mostly the Rich and corporate ones. So when things get out of hand, consider the reason why things got out of hand and not just the ‘who’ dropped the bomb (if that happens). Those who allowed for the dangers will have plenty of blood on their hands and history must record and openly name and shame those involved too.

It could be the only true historical manifest to stop greed (nothing else seems to work).

There is a third side to this, if America would be willing to allow for indirect terrorist support (Iran supporting Hamas) through economic windfall, then are we not obliged to pronounce the US bankrupt? If freedom is only gotten through ledgers and by approval of the banks and the wealthy, then how free are US citizen really?

 

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June 22, 2013 · 16:57

What is an economy?

Yesterday we saw all kinds of movement in the markets. The start of this was a violent sell off in almost direct answer to a message be Ben Bernanke (Source:  http://www.guardian.co.uk/business/2013/jun/20/stock-markets-violent-sell-off ). It is a name that ‘shines’ to some extent when we watch the movie ‘Inside Job’. Mr Bernanke has been involved with the Federal Reserve for over a decade and has been the chairman of the Federal Reserve since 2006. Bernanke’s message that started a whole lot was to end QE (Quantitative Easing). Is it wrong? That is the debate that many want to start, yet we are currently in a phase where this approach to bond buying must stop, the question is not just why, it is also current to ask why not sooner, or why would this have such a strong effect on global markets to this effect.

Does this event show that the US is actually getting stronger, or is the rest of Europe’s so much weaker? My initial voice goes to the second part and I will explain why. If we consider the outstanding debts then we must agree that the US remains now and for some time to come on the utter brink of bankruptcy. The total US debts are well over 120 trillion (almost 17 trillion national debt), which is so much outside of the reach of repaying for a long time to come. There is the valid question why the US should support Europe to the extent it is doing at present. Europe is so not getting a handle on their spending and many nations are showing more and more delay to getting it all under control. This is not just fuelling UKIP and the reason that the UK population is more and more intent on leaving the European Community, parties within the US are validly asking, why are we paying for all this? As the US pays the IMF and they keep on pouring money into bottomless pits like Greece, more and more are asking questions as to why this should continue.

It gets even better. If we add the sums of payments by the different parties into getting the economy going (jump starting was the label they used) , we end up with an amount well over the sum of all outstanding mortgages in US and Europe. So if we consider that amount, then consider the option of paying of the mortgage of EVERY household making less than $70K. That amount would be less than the amounts paid to get the economy started. In effect, no mortgage means that people would be spending money everywhere and the US (and also the European Community) would have an economy that is up and running.

So as Ben Bernanke stops QE and as the US is buying back the outstanding bonds the markets will not suffer, but they will reflect the poor position everyone is in.

If we see the past of Rothschild we see: “Amschel Rothschild’s (1773–1855) definition of economy saw this as financing national projects such as wars, goods and infrastructure”. Economy would be defined as a national economy as a classification for the economic activities of the citizens of a state. So our view of economy (you and me in general) sees this in relation to the citizens. As such, the US economy is seen as extremely poor as one out of six lost their house; one in ten had no job. This has now improved to one in 12 (which is really not that good yet), yet the overall considering healthcare (or lack thereof) and other topics mean that the economy is not yet in a state of health. It is only barely starting to be on a road to recovery. The Federal Reserve is considering that dropping QE would enable a stronger wave of recovery. Is that wrong? When we read about the economy in many places, and how much better the economy is doing, we feel we are being lied to, yet, is that true?

that point of view only hangs on what the definition of economy is. In a global market where we look on how corporations are doing in their markets we see a definition devoid of citizens as they only consider the consumers. I think that their definition is wrong, yet it is not incorrect. Many of us seem to look with at the same picture with wrong (different) standards and values.

If the market drops (as it did yesterday) because these sellable items are no longer there, then this is another matter. If a shop loses one item and it drops to such an extent, then we see evidence that are (or have been) living for the most of the ROI of one successful item. Today’s message on the Guardian (source: http://www.guardian.co.uk/global/2013/jun/21/global-markets-stablise-crisis-euro) only gives strength to my views. It shows on how Greece needs another 3 Billion, how can this continue?

The article shows the following quotes that are important for the next part: “EU leaders in Luxembourg are holding a day (and probably night) of talks to create rules that force losses onto large savers when banks fail.”

So like Cyprus, those who saved money for their retirement will see it dwindle? Because in Cyprus those over 100K Euro lost a bundle. After working up to 45 years, their retirement all based on joy of working hard is getting cut because no one has either the guts or the insight to actually deal with the banks and the governments behind these events?

Sweden’s Finance minister Anders Borg emphasised on the dangers of those moves. Also stated in the article by the Guardian was “A draft bill has suggests bank shareholders should suffer first, followed by bondholders and then savers. A new fund could also be set up to oversee new tighter rules.”

Now, I get the shareholders suffering side of this. When you invest in shares, you invest in risk. Yet the one part that needs an overhaul, the banks and their board of directors are still not properly dealt with. So whatever draft will be created on dealing with banks and their path of recovery is still not laid out in full. However, with the promotion of bad bank separation only gives pressure on taxation and tax payers. Who wants to live in such an environment, where what I see as unacceptable levels of risk-taking remaining undealt with. To me it seems that it is more humane to legalise drunk driving as that will only kill of a few people, the fact that banks and risk-taking financial institutions can dump these levels of risk on a population group many times the size over is just absurd.

We see all these ideas and patch jobs, yet the instigators of the harm we witnessed since 2004 keep on getting a pass by ‘the deans of industry’ to walk, talk and deal wherever they want. Especially after Cyprus, where we now see the legal proposals to force losses somewhere, seem to be less vocal on jailing the board of directors of banks when these levels of loss become visible. They apparently did not break any laws. If being drunk in traffic is no defence in court, how can irresponsible short-sightedness in financial institutions be legal? This level of high stakes poker where losses are not punished and winnings go to the individual must stop. In that same regard where the European Community (EC) is adding nation after nation, and when these places start to overspend as banks and politicians that the EC stamp is a free for all for name and fame making is short term and the outstanding debts are all dumped on the tax payers in the end. Perhaps it is no longer about saving failed banks. Perhaps any failing bank should be nationalised. The members of the board are investigated for negligence, whilst their belongings are sold at auction and they are scrapped from the banking and financial industry where they may never work again on any level of authority.
Yes, I agree this is equally an overreaction.

Yet, currently nothing seems to be effectively done. Greece remains a slice of evidence in that regard. It is nice for the Greek population to blame others (especially Germany), yet these levels of non-control into the Greek debts come from Greece. It is their own previous government being so utterly irresponsible, not to mention some of the financial institutions who were residing there. From Bloomberg this quote came: “Let’s begin with the observation that irresponsible borrowers can’t exist without irresponsible lenders“. There is logic in that statement. Can we however also mention that Goldman Sachs had given the assistance to hide the levels of Deficit in Greece? So there were more elements in play. Perhaps, when the Greek banks do go into a toxic bank solution, they should consider adding their entire Greek mortgage portfolio and add that to the bad bank. If you truly want to start an economy, taking away their fear of homelessness will go a long way. Especially when the monthly mortgage could then be spend on items that truly jump start an economy.

When nations and conglomerates are talking about the economy, then you should ask them ‘what is YOUR definition of an economy’. It is the same issue as companies hiding behind revenue. Revenue sounds nice, but the reality is profit and contribution. It is what is left after the costs are removed. You will see that many places are not in a good position and they are not getting better any day soon.

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March 3, 2013 · 16:51

March Hare of Government

Most of us have seen the news and heard the messages of the sequester cuts for the US of 85 billion dollars. How so many are now up in arms.
Let us be honest! This is all a load of rubbish (imho)! The deficit is 16+ trillion dollars. At 0.5% interest annual interest should be well over 80 billion a year, so they are still skating backwards if only 0.5% interest was due. In reality, as we doubt whether the US will EVER correctly deal with their debts we could consider the fact that it should be a lot higher than that. Also, important that even at 0% interest, it will take 200 years to get rid of a deficit this high. Are you awake yet?
I already mentioned it in 2011 that America was joining the 3G nations (nations that will need 3 generations to get rid of their debt). I was not alone in these thoughts; people like Glenn Beck, Bill O’Reilly and others were on THAT bandwagon as early as 2010. No one listened, all claimed it was not that bad, and it is now shown more clearly on a daily basis that it is getting worse. Yes, a March Hare is in charge of US Government. Oh Boy! The US is not alone in this situation, that same Looney Tunes character, created by Lewis Carroll seems to be in charge all over the commonwealth too. You know, those smaller world leading countries like UK, Australia and to some extent even in Canada. Lewis would be so delighted that he could have added in the cover of his book “These characters are based on leading individuals of the British Empire and those bloody colonials” (sorry US, I could not resist this).
First of all, for the next part, you must realise something first: “I AM NOT A RICH MAN!”
All capitals, I insist! The issue is that I am on the Republican side in this. It is also why I am so angry in regards of the (imho) the statement, which i consider to be BS, voiced by President Obama all over the news. He states “This was not necessary”, I say yes it is. He has overspent to such a degree that these cuts are essential for that nation to NOT go bankrupt. It is also linked to my life philosophy. I have always believed in being a Return on Investment. I get a job and that boss makes a profit by having me. I have worked on dozens of projects every quarter for over 20 years, and my bosses made more than just a small profit. This is how it should go. A company makes profit and that company continues and its staff members have a job. I believe in this simple premise with all my being.
You might think it is a simple and naive approach, but consider to alternative from the financial industry. They play markets on assumptions and reap benefits on image and commissions on a premise, not a given, and not on an actual creation of wealth. That was shown by Goldman Sachs in the 2008 issue where they banked on bad credit and foreclosures to make quick cash. All legal, but that should never have been allowed. This part now reflects back to the US government as these loop holes are still NOT stopped, and they just keep on grabbing from the wealthy and not from the immoral. These two groups are not the same.
This is however, not just about the US. the UK, Australia, the Netherlands, Italy and even France are going in EXACTLY the same direction. In the Netherlands on March 1st their Easter Bunny surprise is about to show the nasty side as it might go into a burnout as they are trying to find 4.3 Billion Euro in cut backs. Not unlike the US, they have been overspending for almost a decade and instead of taking heed then, they left it until they were no longer in office. You just need to check the Dutch newscasts between 2009 and 2011 to see dozens of articles “GroenLinks: bezuinigen is helemaal niet nodig” (the Greens state that cutbacks are not needed). These were often specific issues; however, the overall clear issue is that cutbacks were left too late. Any doubts? Consider that 250 million Euro annual cutbacks in 2008 onwards could have prevented a 4 billion cutback almost essential now. I use the word ‘almost’ as the method of cut backs is nearly always a debatable thing. All parties are passionate on protecting THEIR groups, but some must give in to the needs of cut backs. The CDA (Christian Democrats) are actually voicing a lot like the Republicans. It cannot remain about cutbacks; it must be about proper spending of what is available. So here we have our first direct link.
Two parties who I personally never really agreed with are voicing a solution that is simple and clear. I am NOT against taxing the rich to a certain degree (I am not rich, so fair enough). But NO nation can continue when the rich are taxed to such a degree they move away to other liveable lands. And in all fairness, that group is small. So small that taking them another 1% will NOT EVER get the government the money mountain they need. Should you doubt this, and that is fair enough, one must always question things, consider 1% to make 85 billion needs an Income group of billionaires making a sum of 8.5 trillion dollars. The US, UK and Australia combined do not have that amount of billionaires. This is the empty cloud that Democrats are offering. Which is why I oppose this mindless action. Spending needs to be put under control for a long time, long before 2011. I will state that this is not all President Obama’s fault. He did inherit a bad situation and that must be stated if we look at this honestly. I believe he truly thought that his approach to the bad economy was the best solution. I cannot fault or blame ideology. Yet, 4 years in office showed so clearly that this was NEVER a solution. So why he is continuing that method in his second term is in all honesty beyond me.

So, now let us add the next shackle in this chain. The UK and Australia are already feeling the weights of healthcare. In 2011 the UK had a population of 60 million people. For the period 2010-2011 the NHS had spent 51 billion pounds (as mentioned by the UK department of health). That almost equates to 1000 pounds per person (roughly $1500). A large slice of the UK population never gets sick or treated, yet the group that needs healthcare therefore required more than the 1000 pounds. This figure will shift as the population is growing old and grey. It is clear that the NHS will need more and more money, which is a clear reality many nations face. That links back to US healthcare. Whether it is labelled as Obamacare, as Healthcare or whatever coat of labelling it needs. Forbes reported in 2012 that US healthcare was set around 3 Trillion dollars. Now take a population of 325 Million in the US. Then we see that 1500 dollars do not get us anywhere near the needs of the UK. We can make two conclusions. Either the average American is very unhealthy, or that Medicare in the US is vastly overpriced.
OK, I admit that this equation is very simple and there are more factors at work. However, I hope that it is clear to most that something is wrong. I have stated before that the US seems to be a greed driven society (even though it is mostly visible in Banking and Financial Institutions), Shakespeare would state that there seems to be a stench coming from the state of budgeting (Hamlet banking association, 2008). Just to be certain you do not get the wrong impression, oddly enough Nurses seem to get the smallest part from that barrel, so they are constantly being underpaid (a global truth), so where does all the money go?

The next is generic and not just connected to healthcare. There seems to be too many managers in a company. If America is a ship, then the President is its captain. That is simple and clear. It is however an issue that this administration could be regarded as a badly stocked Titanic with 132 Pursers, 373 stewards, 83 cooks, 227 barkeepers, 93 janitors and the odd Marshall. The issue is that the paying crew is roughly 2000. This could never continue. When the servicing crew is at almost 50% of the paying customers, then either this population starts paying a hell of a lot more, or the ship sinks. I hope that this comparison is a lot clearer. It is actually close to the comparison as the RMS Titanic was populated. Yet, that ship was mostly designed for the indulgent and the wealthy. I hope that some will remember what happened. 1502 people died there. The numbers almost equates that one crew member saves one passenger, the rest is out of luck (I am NOT stating that this is what happened on the RMS Titanic). That is however how the US economy is seen by many. The numbers are a little harder. They are unclear on how many people lost their homes and never got another home. The numbers add up into the millions, and it seems to be around that one in six lost a home forever. So one government worker saves one citizen, the rest is out of luck. This seems to be the Nanny state as some call it. Funds for all! Yet, when no money is coming in, that nation gets shut down real fast. All nations depend on actual money making contribution to survive.

This is how 2013 is starting for the US. The bad issues coming is NOT because of some sequester. It is NOT because someone reports moderate growth. There is a collection of machines left, right and liberal trying to get what they can secure. We can look at Heidi Moore of the Guardian or Maxwell Strachan of the Huffington post. There is long term of financial pain coming and no one is safe. Yet, in all this, it is interesting how some ‘experts’ like Agentschap NL and NABE seem to predict a +2% growth in 2014. What is this? The land of the Umpa Lumpa’s?

I would love those numbers to be realistic. It seems however that those ‘experts’ are more and more moving to the mindset of market research where they seem to present what a government would like to reflect then to the area of research where we reflect the actual facts. Neither is a lie, but one is very very incorrect. All governments want to see nice indications, so they can forward the invoice. That time is gone; we have overspent for too long. Unless spending is reduced greatly, and fat is cut all over we will not see any good growth. If you doubt that, then look at the issues now going on all over Europe as horse meat is added to ‘expensive’ beef. When the daily issues of life are frauded on, then they have met rock bottom. There is no way you can ignore that (as far as I know it takes twice the time to grow a horse to adulthood, compared to a cow, which makes me wonder what on earth is ACTUALLY going on).
So let us get back on that horse steak and drive back to the so called ‘financial growth’. The seen level of misrepresentation is exactly how we move towards the Abyss. Some of those ‘experts’ might point to such good profitable places like China and India where things are currently so prosperous and how we all could be this successful. They are deceiving YOU and delusional towards themselves. You see, YES, Those two places are going forward, and 10,000 new millionaires seem to pop up. Yet, this is due to them voicing the need of outsourcing. WE lost those jobs (perhaps forever). They were cheap, and like on any ‘slave’ farm, there are guards and overseers getting a fair wage for every 10000 workers who are getting mere pennies (in comparison). Now consider that one third of the global population lives in those two nations. So that number of 10000 millionaires seems ‘fair’. Now add to this, a consumer market that could be slowly collapsing. We now have the means for that iPad, Ultrabook or iPhone, but is that still possible in January 2014? Soon this curve will level and then I expect it to decrease. Whether the decrease is short term, or long term I cannot foresee at present (there is no way to tell). But from my point of view it seems that America with their 200 years of debt would be living on slim margins for a very long time to come. If the Commonwealth and the EEC do NOT severely change their budgeting habits we will end in a similar predicament. Make no mistake; America will happily push US over the edge to survive a little longer. Then what?

We need to get a lot better and clever on how we do business and how we govern. My worry is that too many politicians on a global scale are not willing to consider that, especially if they and their constituents have to cut back.

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