Pushback as US Expands Surveillance, Taxing Authority?

Several Swiss banks pull out of US tax programme … At least 10 Swiss banks have withdrawn from a U. S. programme aimed at settling a tax dispute between them and the United States, Swiss newspaper NZZ am Sonntag said on Sunday, quoting unnamed sources. Around 100 Swiss banks came forward at the end of last year to work with U. S. authorities in a programme brokered by the Swiss government to help the banks make amends for aiding tax evasion. “At least 10 banks that had decided at the end of 2013 to pay a fine have withdrawn their decision,” NZZ am Sonntag said, quoting unnamed lawyers and auditors. It did not name the banks concerned. – Reuters
Dominant Social Theme: Even though the US is seeking to spread its authority around the world, its functionaries are prepared to be reasonable.
Free-Market Analysis: This article can be seen two ways. One, the US tax regime that it is trying to install in Switzerland is being resisted, at least a little.
On two, the news can be seen as a message that once its tax regime is in place, US officials are prepared to be flexible, at least on the margins.
Got a gripe? Work within the system and you may find it’s resolved “fairly.”

This post was published at The Daily Bell on September 01, 2014.

Labor Day 2014: Economic solutions already here for full employment, zero public deficits and debts

Labor Day is an Orwellian holiday: US ‘leaders’ psychopathically pretend to care about American labor while lying about a real unemployment rate of close to 25% (the so-called ‘official’ rate excludes under-employed and discouraged workers).
Along with unemployment, Americans receive policy enabling oligarchs to ‘legally’ hide $20 to $30 trillion in offshore tax havens in a rigged-casino economy designed for ‘peak inequality.’ For comparison, $1 to $3 trillion ends global poverty forever, saving a million children’s lives every month from slow and gruesome death (here, here). And, as always, US ‘leaders’ lie-begat Americans intounlawful Wars of Aggression (in comparison, 11 days of US war cost would pay for all tuition of US college students).
Americans could have full-employment and zero public deficits and debt with monetary and credit reform.
These solutions are obvious upon a few moments of your attention. See for yourself:
What is monetary and credit reform?
Since the 1913 legislation of the Federal Reserve, the US has had a national ‘debt system;’ the Orwellian opposite of a monetary system. What we use for money is created as a debt, with the consequence of unpayable and increasing aggregate debt. This is a description of the simple mechanics of adding negative numbers. Although it’s taught in every macroeconomics course in structure, the consequences of increasing and unpayable debt are omitted (unpayable because it destroys what is used for money, and eventually the debt becomes tragic-comic in amount).

This post was published at Washingtons Blog on August 30, 2014.

Keiser Report: Fast Food Tax Evasion (E647)

The following video was published by RT on Aug 30, 2014
In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss Burger King, yet another company fleeing America for yet another ‘free’ healthcare nation, Canada. Meanwhile, back in America naked incidents are on the rise and, in Europe, suicide tourism rises four-fold. In the second half, Max interviews Trace Mayer about bitcoin, central banking and geopolitics.

Is There Capitalism After Cronyism?

The more the Status Quo pursues the same old Keynesian Cargo Cult script of central planning and free money for financiers, the more self-liquidating the system becomes.
Judging by the mainstream media, the most pressing problems facing capitalism are:
2) the failure of laissez-faire markets to regulate their excesses, a common critique encapsulated by Paul Craig Roberts’ recent book The Failure of Laissez Faire Capitalism.
These critiques (and many similar diagnoses) reach a widely shared conclusion: capitalism must be reformed to save it from itself.
The proposed reforms align with each analyst’s basic ideological bent. Piketty’s solution to rising wealth inequality is the ultimate in statist centralization: a global wealth tax.
Roberts and others recommend reforming capitalism to embody social purpose and recognize environmental limits. Exactly how this economic reformation should be implemented is a question that sparks debates across the ideological spectrum, but the idea that capitalism can be reformed is generally accepted by left, right and libertarian alike.
Socio-economist Immanuel Wallerstein asks a larger question: can the current iteration of global capitalism be reformed, or is it poised to be replaced by some other arrangement?

This post was published at Charles Hugh Smith on SATURDAY, AUGUST 30, 2014.

CFR Recommends Policy Shift that is Very Bullish for Gold

The ‘Foreign Affaird’ publication of the influential and policy-setting Council of Foreign Relations made an announcement that could have huge ramifications for monetary policy going forward. In an article titled ‘Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People,’ the authors argue that the current quantitative easing and debt monetization is not generating broad-based stimulus to the economy.
To some extent, low inflation reflects intense competition in an increasingly globalized economy. But it also occurs when people and businesses are too hesitant to spend their money, which keeps unemployment high and wage growth low. In the eurozone, inflation has recently dropped perilously close to zero. And some countries, such as Portugal and Spain, may already be experiencing deflation. At best, the current policies are not working; at worst, they will lead to further instability and prolonged stagnation.
Governments must do better. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.
This is a huge announcement because it would lead to a major increase in the velocity of money. While a tremendous amount of money was created following the financing crisis, it has yet to result in significant inflation as a good amount of it remains parked in excess reserves and in corporate accounts. This has brought the velocity of money to the lowest levels in decades.

This post was published at GoldStockBull on August 27th, 2014.

The War on Airbnb

The web startup Airbnb is finding itself in hot water lately. A peer-to-peer service that matches renters with rentiers, the company is under attack by entrenched lodging businesses such as hotels. It’s easy to see why. The company, which is fairly decentralized, breaks through the thicket of established chains. It matches real people with real people, each seeking to mutually profit from one another. As Jeffrey Tucker writes, Airbnb allows ‘regular people to cut through stultifying regulations and make better lives for themselves.’ It breaks a sacred rule of economics: anything that bypasses the hold of legacy businesses is bound to garner unwanted interference.
In a confusing column for Bloomberg View, Leonid Bershidsky encourages government regulation of Airbnb for reasons totally unclear. As a resident of Berlin, Bershidsky feels crossed by the startup’s business model. He thinks that local governments give too much leeway to Airbnb hosts, and doesn’t gouge them enough for ransom payments known as taxes. He complains that it’s hard to find liveable, long-term apartments in Berlin because a service like Airbnb emphasizes short-term rentals. He writes: ‘I’m pleased that Berlin has banned short-time rentals without express permission from the city government.’
Why so much angst? Apparently, Bershidsky had a tough time finding an apartment in the most populated area of the city. But rather than chalk it up as a fact of condensed living environments, he pins the blame on Airbnb. Since the peer-to-peer network makes it easier to rent out extra rooms or beds, it makes it profitable to do so on a continual basis. People with larger apartments can have a continuous flow of guests fill their space, make some extra cash, and overall assist in the dynamic market process.

This post was published at Mises Canada on Friday, August 29th, 2014.

30 BLOCKS OF MURALS & CIGARETTE TAXES FOR THE CHILDREN

It’s that time of year again – when the little juvenile delinquents, future prison inmates, and functionally illiterate junior members of the free shit army pick up their ‘free’ backpacks and ‘free’ school supplies they will never use and shuffle off to the decaying prison like schools in the City of Philadelphia to eat ‘free’ breakfasts and ‘free’ lunches, while being taught government sanctioned pablum by overpaid mediocre union teachers.
It’s a repeat of every year for the Phila school district. As the school year approaches they are shocked to report a massive deficit and beg the State of PA for more funding. The $12,000 per child simply isn’t enough, even though Parochial schools provide ten times the education for $9,000 per child. The district has a slight $80 million deficit this year. Last year they had a $100 million deficit and the mayor proposed a soda tax to fill the gap. It was defeated, so they raised property taxes instead. Mayor Nutter’s name is fitting. He is just another in a long line of Democratic mayors who have ruled Philadelphia since the 1950′s and whose policies of welfare handouts for their voting base paid for by taxing the producers, has resulted in a population decline from 2.1 million in 1950 to 1.5 million today. Doug Casey captures the essence of Philly with this definition:
Ineptocracy (in-ep-toc’-ra-cy)
: a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers. The liberal solution to an ever decreasing tax base and an ever growing level of benefits for the free shit army and government union drones, is to increase taxes on the few remaining producers. They then flee the city, leaving fewer producers to tax. Rinse and repeat. Your neighborhoods then look like this.

This post was published at The Burning Platform on 28th August 2014.

Largarde under Criminal Investigation for Corruption in France

Christine Lagarde has long been suspected of corruption yet of course the International Monetary Fund’s (IMF) board proclaimed they firmly stand behind her because she has raised the stature of the IMF to a world player once again thanks to Obama and their joint agenda to raise our taxes to 80% and confiscate 10% of everyone’s bank account to pay for the bankers. Christine Lagarde is facing a criminal investigation in France that is tied to a political corruption probe dating from 2008.
The allegations by French magistrates earlier in the week placed Lagarde squarely under formal investigation for ‘negligence’ after questioning her in Paris for a fourth time.

This post was published at Armstrong Economics on August 29, 2014.

Stock Markets in their Third Bubble Since 2000

The S&P 500 just passed the 2,000-point psychological threshold, an absolute record for that index, created in 1950 and comprising the 500 largest companies traded on the U. S. stock market, thus being more representative than the famous Dow Jones Industrial Index, with its 30 companies. This new record would seem to show that the U. S. recovery is under way… but let’s step back a little in order to evaluate these numbers.
As can be seen on this 1950-end of 2013 graph (reaching 1,600 points), the S&P 500 has been quite erratic since the 2000s, with two bubbles that burst! But let’s get back to the ’80s… Back then was the triumph of Ronald Reagan’s ‘conservative revolution’, which led to a vast liberalisation of the economy with whole sectors being allowed to compete (air transportation and telecoms, notably), while at the same time income tax was reduced, thus encouraging wealth creation. Sound growth takes place and the United States comes out of the ’70s crisis on the way to two wealth producing decades.
In all logic, the S&P 500 starts to rise in 1982, with the 1987 October crash being just a glitch quickly forgotten. But, starting in 1995, the trend picks up, with the start of the ‘internet bubble’. Much hope is placed in the nascent network and heads are spinning a little too much. The bubble burst, beginning of 2000, and the S&P 500 went from a peak of 1,527 to a trough of 800 in 2002, almost down by half.

This post was published at Gold Broker on Aug 28, 2014.

Keynesian Fairy Tale Alert: Establishment Citadel – Council On Foreign Relations – -Peddles Helicopter Money Plan

Folks, take economic cover. There is already a rabid financial mania loose in the land as reflected in the irrational exuberance of the stock market, but, in fact, the fairy tale economics fueling the current financial bubble is fixing to leap into a whole new realm of lunacy. Namely, an out-and-out drop of ‘helicopter money’ to the main street masses.
That’s right. The Keynesian brain freeze has so deeply infected the Wall Street/ Washington corridor that the grey old lady of the establishment, the Council On Foreign Relations, has lent the pages of its prestigious journal, Foreign Affairs, to the following blithering gibberish:
It’s well past time, then, for U. S. policymakers – as well as their counterparts in other developed countries – to consider a version of Friedman’s helicopter drops….. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.
I have actually checked, and, no, the publishing arm of the Council on Foreign Relations has not been hacked by writers from the Onion. This monetary insanity is for real!

This post was published at David Stockmans Contra Corner on August 29, 2014.

MUST READ: A Fraud By Any Other Name Is Still A Fraud

Once upon a time, there was a thing called a ‘free-market’ and for a time nations strove toward this ideal. To wit, a free market economy was a market-based economy where prices for goods and services would be set freely by the forces of supply and demand and allowed to reach their point of equilibrium without intervention by government policy, and it typically entailed support for highly competitive markets and private ownership of productive enterprises.
But power and belief shifted and faith now resides in governmental fiscal policy (spend more, tax less) and central banker interest rate policy (make money ever cheaper) to avoid the free markets down-cycles and extend its up-cycles infinitely. The central bank high priests have determined free markets are better replaced by command economies and further the priests’ purport they know appropriate levels of demand and supply…and absent the achievement of these levels, they will enforce their will even if the Fed’s programs are the likely cause that retards the Fed’s from achieving their stated goals!
But this has gone so far that now all we have is fiscal imbalances (the true nature is hidden by accounting fraud) and central bank centralized command of financial valuations. And I’m not being dramatic… I truly mean the Fed and central bankers are controlling the pricing of nearly everything financial (including sovereign debt / bonds, stocks, real estate, commodity prices, etc.) via interest rate targets and bond purchasing programs. The politicization and centralized control has turned the economic indexes into the central banks gauges which they actively ‘manage’.

This post was published at SRSrocco Report on August 29, 2014.

Japanese Household Spending Slumps 5.9%; Cries for More Monetary Stimulus

Consumer spending in Japan slumped in June because of a tax hike pushed through by Prime Minister Shinzo Abe. Economists claimed it would be temporary and spending would quickly recover thanks to inflation.
Let’s take a look at what actually happened.
Japanese Household Spending Slumps 5.9%
Yahoo!Finance reports Japan Household Spending Slumps, Output Flat as Tax Pain Persists
Japanese household spending fell much more than expected and factory output remained weak in July after plunging in June, government data showed, suggesting that soft exports and a sales tax hike in April may drag on the economy longer than expected.
Household spending fell 5.9 percent in July from a year earlier, nearly double the drop forecast in a Reuters poll, as the higher levy and bad weather kept consumers at home instead of going out shopping.

This post was published at Global Economic Analysis on Friday, August 29, 2014.

The Unprecedented Failure to Regulate Citigroup Continues

Yesterday, Wall Street’s self-regulator, the Financial Industry Regulatory Authority (FINRA), charged Citigroup with cheating its customers out of fair prices on preferred stock trades – 22,000 times. Citigroup was fined a meager $1.85 million, ordered to pay $638,000 in restitution, allowed to neither deny or admit the charges, and sent on its merry way to loot the next unwary investor.
Why do we believe there will be more charges of malfeasance in Citigroup’s future? Because it is an unrepentant recidivist. Yesterday’s FINRA fine was the 408th fine that FINRA has levied against Citigroup Global Markets or its predecessor, Smith Barney, for trading violations, market manipulations or failure to supervise its traders or brokers.
And that’s just FINRA – the light-handed disciplinarian with industry ties. Citigroup has kept other Federal regulators, including the U. S. Justice Department, very busy as well.
It is now six years since Citigroup’s serial history of rogue conduct rendered it insolvent. Under the law, the U. S. government is not allowed to prop up insolvent banks with taxpayer money. But from 2007 to 2010, in the largest bank bailout in history, over $2.3 trillion was lavished on the serial recidivist Citigroup.
Citigroup received $25 billion in Troubled Asset Relief Program (TARP) funds on October 28, 2008. Less than a month later, Citigroup had blown through those bailout funds and required another $20 billion TARP infusion. But its situation was so wobbly that the government had to simultaneously provide another $306 billion in asset guarantees.

This post was published at Wall Street On Parade on August 27, 2014.

Jaw-Dropping Revelation: Justice Department Confirms Lost IRS Emails Are Stored On Backup Drives

For weeks the IRS and Obama Administration told the American people a carefully crafted narrative regarding the whereabouts of emails containing information surrounding the targeting of specific groups and individuals based on their political party. The Obama administration vehemently denied that such targeting had taken place or that they had any involvement whatsoever. For their part, IRS heads testified that the thousands of emails belonging to director Lois Lerner, who headed the IRS Exempt Organizations Unit, simply disappeared when her hard drive was thrown away.
Most Americans simply couldn’t believe it. How could an agency that deals with billions of pages worth of tax returns simply lose emails, especially from a department head? Moreover, how is it possible that these emails were not backed up somewhere?
In June we opined that there must be secondary copies of these emails, simply because the government keeps records of everything. Could you imagine what would happen to the IRS if their main email or data server was destroyed by some far off event, and all of the government’s tax revenues for an entire year were lost? Of course not! It’s simply not a reasonable scenario.
It turns out, according to a new report, that the government does have backups.
The Department of Justice has confirmed it.
But there’s a catch. DOJ attorneys and the IRS are now scrambling to offer up an excuse for why they shouldn’t have to show them to the American public.


This post was published at shtfplan on August 26th, 2014.

Revolt of the Luddites: Berlin Moves Against Uber and Airbnb

Uber taxi service banned in Berlin on safety grounds… German capital follows Hamburg with vote to ban taxi app firm, saying it does not protect passengers from unlicensed drivers … Berlin has voted to ban Uber on safety grounds as the app-enabled taxi service continues to run up against resistance in Germany. Officials said the Californian company, which operates in 110 cities around the world, did not do enough to protect its passengers from unlicensed drivers. – UK Guardian
Dominant Social Theme: New kinds of commerce are dangerous.
Free-Market Analysis: Berlin is leading the way for neo-Luddites, confronting both Internet-based taxi services and lodging facilities.
Most of the sectors where the Internet is having the most dramatic effect are heavily regulated and thus inefficient and lacking in consumer choice. A prime example of this is “Uber” – an Internet-based transportation app. Another is Airbnb, a lodging facility.
Here’s more from the Guardian regarding Uber:
A senate statement said Uber – already banned in Hamburg – also failed to provide adequate insurance for its drivers or their passengers in accidents. The Berlin ruling states: “Uber is from now on no longer allowed to use a smartphone app or similar application, or offer services via this app which are in breach of the Public Transport Act.”
Uber said it would appeal against the ban, saying the senate’s decision was “anything but progressive”, and it was “seeking to limit consumer choice for all the wrong reasons”. Uber claims that it does not operate a taxi service, but merely offers a platform that mediates between drivers and customers.

This post was published at The Daily Bell on August 26, 2014.

Children Are Taxed on Medals Given Their Father in War

The Telegraph has reported how the British government desperate for money, is taxing even medals given to soldiers for their bravery in war. The story in the Telegraph reports – ‘I was told to pay death duty on Dad’s medals’. There is nothing sensitive about these people in government. When I say we are in a massive collapse of socialism because these people have paid themselves lavish pensions that need funding, there is really no limit to the indignity they are imposing upon the people. At this rate, if the government wants to hand you medal, you better ask will I be taxed in the future for even having these? Just amazing.

This post was published at Armstrong Economics on August 25, 2014

Spotting The Next Detroit – America’s Fasting-Shrinking Cities

Whether Detroit’s slumping population was cause or effect (or both) in its demise remains up for discussion; either way, in the ever-more-entitled and ever-less-working world in which we live, a declining population in the face of increasingly promised benefits has only two ends – death (bankruptcy) or taxes. In spite of almost record-low Muni market yields (and spreads), risks remain – just ask the HY market… and these 25 cities have the highest rate of population decline in America.

This post was published at Zero Hedge on 08/25/2014

The G-20′s Solution To Systemically Unstable, “Too Big To Fail” Banks: More Debt

It’s been 6 years since Lehman went bankrupt overnight, stunning bondholders who were forced to reprice Lehman bonds from 80 to 8 (see chart below) in a millisecond, and launching the world’s worst depression since the 1930s, which courtesy of some $10 trillion in central bank liquidity injections, has been split up into several more palatable for public consumptions “recessions”, of which Europe is about to succumb to the third consecutive one even if for the time being the Fed’s has succeeded in if not breaking the business cycle, then certainly delaying the inevitable onset of the next major contraction in the US economy.
Paradoxically, instead of taking advantage of this lull in volatility and relative economic calm, and making the financial system more stable, all so-called regulation has done, is paid lip service to the underlying problems, hoping that should the next crisis appear the Fed will be able to delay it yet again by throwing countless amounts of taxpayer money at the problem. In the meantime, the biggest banks have gotten so big that the failure of one JPM or Deutsche Bank, and their hundreds of trillions in gross notional derivatives, would lead to the biggest financial and economic catastrophe ever witnessed and make 2008 seem like a fond memory of economic euphoria.
So finally, with a 6 year delay, the western world’s “government leaders” have finally decided to do something about a TBTF problem that has never been more acute. According to Reuters, in November said leaders will agree “that the world’s top banks must issue special bonds to increase the amount of capital which can be tapped in a crisis instead of calling on taxpayers to come to the rescue, industry and G20 officials said.” In other words, suddenly the $2.8 trillion in Fed injected excess reserves, split roughly equally between US and European banks, are no longer sufficient, and while regulators are on one hand delaying the implementation of Basel III and its tougher capital rules, on the other they are tacticly admitting that whatever “generous” capital buffer banks have on their books right now will not be sufficient when the next crisis strikes.

This post was published at Zero Hedge on 08/23/2014

How Hedge Funds Are Making Money In 2014: The Full Strategy Breakdown

As part of his latest weekly report, Goldman’s David Kostin breaks down the full array of strategy “baskets” used by hedge funds at this moment to outperform the market in 2014. In a nutshell, the best performing strats right now involve betting on a high vs low tax rate divergence (perhaps because companies facing high tax regimes are soaring on hopes they will engage in a price-boosting tax inversion deal), and shorting BRIC exposure:

This post was published at Zero Hedge on 08/24/2014