“When government fears the people, there is liberty. When the people fear the government, there is tyranny.” Thomas Jefferson

The government is our servant; not our master.

Brexit 2

The more forcefully the Establishment tell Brits what to do, the more likely it is they will do exactly the opposite.

50% of people don’t vote and 50% don’t read newspapers. Let’s hope it was the same 50%….

50% of people don’t vote & 50% don’t read newspapers – I hope it’s the same 50%.

50% of people don’t vote & 50% don’t read newspapers – I hope it’s the same 50%.

Gore Vidal

Tax is a fine for doing well……

Tax is a fine for doing well……

In Italy, They’re Now Taxing Shadows [yes, really]

Store owners in Conegliano, Italy are now faced with the unfortunate (albeit comically absurd) proposition of paying taxes on shadows

For example:

If a store or a bar has an awning outside, which creates a shadow on public property, they must pay a fee that is part of the tax on public land use.

Mathias, 31, took over his shop in 2008. Outside, to protect the window from the sun so that the foodstuffs are not directly exposed to light, he has installed a curtain of 4 m2. A few days ago he received from Abaco, the company that manages the tax on behalf of the City, the payment request. The tax is charged at €8.40 per m2 and the fee payable was €34.

The best thing about this policy (if you’re the government) is that taken to its logical extreme, you could charge everyone a fee on sunny days as you are probably using public land by casting a shadow. Coming to a UK Chancellor ….soon.

Money on Deposit is no Longer Your Money

Published on 26/01/2015

Following the recent G20 meeting, large deposits held at banks will not be your money but rather it will become part of a bank’s capital structure. In the event of a government “bailout” for a “failing” [Nb. not “failed”] bank, they will now have a “bail-in” in which your money held on deposit will now be a creditor of the bank. Large-scale deposits will be, both de facto and de jure, just another creditor squabbling over their share of the assets of a failed bank. This now means that investors should now prefer to hold bank notes as opposed to putting money on deposit. Because deposits will not be “money” in a failing bank but bank notes will be [bank notes cannot be written down or given a “haircut”].
Could this precipitate a run on a bank, we ask? Rather than reining in the massive and risky derivatives casino, the new rules prioritise the payment of banks’ derivatives obligations to each other, ahead of everyone else. That includes not only depositors, public and private, but the pension funds that are the target market for the latest bail-in play, called “bail-inable” bonds. “Bail-in” has been sold as avoiding future government bailouts and eliminating too big to fail (TBTF). But it actually institutionalises TBTF, since the big banks are kept in business by expropriating the funds of their creditors. It is a neat solution for bankers and politicians, who don’t want to have to deal with another messy banking crisis and are happy to see it disposed of by statute. But a bail-in could have worse consequences than a bailout for the public.
If your taxes go up, you will probably still be able to pay the bills. If your bank account or pension gets wiped out, you could wind up in the street or sharing food with your pets.
The consultation document from the UK’s Treasury lists the following bank creditors who will rank ABOVE depositors in a ‘failing’ financial institution:

• Liabilities representing protected deposits (in the UK the government guarantee protects 100% of deposits up to the value of £85K
• Any liability, so far as it is secured
• Liabilities that the bank has by virtue of holding client assets • Liabilities arising with an original maturity of less than 7 days owed by the banks to a credit institution or investment firm
• Liabilities owed to central counter parties recognized by the European Securities and Markets Authorities… on OTC derivatives, central counterparties and trade depositaries
• Liabilities owed to an employee or former employee in relation to salary or other remuneration, except variable remuneration
• Liabilities owed to an employee or former employee in relation to rights under a pension scheme, except rights to discretionary benefits
• Liabilities owed to creditors arising from the provision to the bank of goods or service (other than financial services) that are critical to the daily functioning of its operations.
The above list makes it clear that deposits larger than £85K will rank ahead of the bond holders of banks, but they will rank above little else.

Whoever wins the election, the UK cannot afford another 5 years of spiralling debt

Published on 25/11/2014

It took the previous government 13 years to rack up debts of £0.7T.
It has taken this government 5 years to double it to £1.4T.
It will take the next government 3 years to add another £0.7T and so it goes on.
This is the road to national bankruptcy.

It will take 185M Man Years to Pay Off UK Debt

Published on 11/11/2014

In the run up to the election next year, the one topic that WON’T be discussed is the UK debt mountain [officially £1.4T]; unofficially £5T; which includes unfunded state obligations like public sector pensions and off balance sheet items.

With the average wage in the UK at £27K, it will take:

  •   52M man years to repay the official debt or
  • 185M man years to repay the real debt

So with 30M wage earners in the UK and an interest rate of 3%, it will take them working non stop for 7 years, sending 100% of their income, as tax to the government, to repay this.

Feeling enslaved yet?

Based on an article by Ann Barnhardt “Aprés la Guerre” Banking and Financial Market Theory

The UK is an Oligarchy

Oligarchy meaning “few”, “to rule or to command”; in which power effectively rests with a small number of people. These people could be distinguished by royalty, wealth, family ties, education, corporate, or military control. Such states are often controlled by a few prominent families who typically pass their influence from one generation to the next, but inheritance is not a necessary condition for the application of this term. Wikipedia

The UK is dominated by a rich and powerful elite. Some might say it has been this way for hundred’s of years; in fact so long it is now called the “aristocracy”.

An oligarchy historically is a society where political and economic life is dominated by a small number of very rich individuals, the oligarchs. This is the thesis put forward in a recent book by Ferdinand Mount that Britain is an oligarchy. This is supported by a similar study in the US which found that even when 80% of the population favored a particular public policy change; it was only instituted 43% of the time . While in a 2012 study, this showed that while only 23% of Americans favored the bank bailouts, they were implemented anyway by a compliant Congress. The role of government is to keep the poligarchs [masses] sedated.

Be in control of your own destiny and take action now to protect your wealth.