PBoC cuts ‘daily fix’ in one-off move that may make currency more responsive to market movements
Exclusive extract: Labor MPs Tim Watts and Clare O’Neil argue Australia must quickly adapt to the technological revolution to remain a fair society
Australia’s national story is unique. A bushranger who spoke poetically about social justice is celebrated, at once a criminal and a national hero. Young Australians have distinguished themselves in war not just for their grit and bravery, but for the easy egalitarian ways between officer and soldier. Our democratic tradition was founded by a motley crew of gold diggers: women and men, local and immigrant, patrician and proletariat, united in protest under the Southern Cross. Through each of these foundation stories runs a common thread: equality.
Related: The best argument against Australian inequality | Miriam Lyons and Ian McAuley
Returns on investment in the early years are usually four to nine dollars returned for every dollar invested.
Related: Better equality in Australia is tainted by high jobless poverty rates
Submitted by John Whitehead via The Rutherford Institute,
“The shaping of the will of Congress and the choosing of the American president has become a privilege reserved to the country’s equestrian classes, a.k.a. the 20% of the population that holds 93% of the wealth, the happy few who run the corporations and the banks, own and operate the news and entertainment media, compose the laws and govern the universities, control the philanthropic foundations, the policy institutes, the casinos, and the sports arenas.”—Journalist Lewis Lapham
Being a citizen in the American corporate state is much like playing against a stacked deck: you’re always going to lose.
The game is rigged, and “we the people” keep getting dealt the same losing hand. Even so, most stay in the game, against all odds, trusting that their luck will change.
The problem, of course, is that luck will not save us. As I make clear in my book,
Trainwreck? Rail traffic fell in July from a year ago as WSJ reports an increase in container volumes couldn’t offset a steep decline in oil and coal shipments according to the Association of American Railroads. Despite almost constant reassurance that plunging oil prices are 'unequivocally good” for America, AAR analysts warn “railroads are overexposed, relative to the economy in general, to the energy sector,” adding that traffic data indiates “growth is slow and the recovery could be threatened by an interest-rate increase by the Fed.”
We have seen this kind of slide before…
Update: The Chinese currency complex is collapsing… 12 month NDFs just hit a new 5 year lows against the USD – biggest plunge since Lehman
One of the biggest drivers of the so-called recovery (in addition to the Fed’s $4.5 trillion balance sheet levitating te S&P500 and the offshore bank accounts of 1% of the US population) has been the US consumer: that tireless spending horse who through thick, thin, recession and depression is expected to take his entire paycheck, and then some tacking on a few extra dollars of debt, and spend it on worthless trinkets.
Sure enough, for the past 8 years, said consumer has done just that and with the help of the endless hopium and Kool-Aid dispensed by the administration (who can forget Tim Geithner’s August 2010 op-ed “Welcome to the Recovery”), and by the political and financial propaganda media, spent, spent and then spent some more hoping that “this time it will be different.”
This all came to a screeching halt earlier today when courtesy of the latest New York Fed Survey of Consumer Expectations, we learned that the US consumer has finally tapped out.
Submitted by Jeff Thomas via InternationallMan.com,
The concept of government is that the people grant to a small group of individuals the ability to establish and maintain controls over them. The inherent flaw in such a concept is that any government will invariably and continually expand upon its controls, resulting in the ever-diminishing freedom of those who granted them the power.
When I was a schoolboy, I was taught that the feudal system of the Middle Ages consisted of serfs tilling small plots of land that belonged to a king or lord. The serfs lived a meagre life of bare subsistence and were subject to the tyranny of the king or lord whose men would ride into their village periodically and take most of the few coins the serfs had earned by their toil.
The lesson I was meant to learn from this was that I should be grateful that, in the modern world, I live in a state of freedom from tyranny, and as an adult, I would pay only that level of tax that could be described as “fair”.
Later in life, I was to learn that, in the actual feudal system, some land was owned by noblemen, some by common men. The commoners typically farmed their own land, whilst the noblemen parcelled out their land to farmers, in trade for a portion of the product of their labours.
As a part of that bargain, the nobleman would pay for an army of professional soldiers to protect both the farms and the farmers. Significantly, unlike today, no farmer was required to defend the land himself, as it was not his.
There was no exact standard as to what the noblemen would charge a farmer under this agreement, but the general standard was “one day’s labour in ten”.
This was not an amount imposed or regulated by any government. The nobleman could charge as much as he wished; however, if he raised his rate significantly, he would find that the farmers would leave and move to another nobleman's farm. The 10% was, in essence, a rate that evolved over time through a free market.
Today, of course, if most countries levied an income tax of a mere 10%, there would be dancing in the streets. And the days of one simple straightforward tax are long gone.
Today, the average person may expect to pay property tax (even if he is a renter), sales tax, capital gains tax, value added tax, inheritance tax, and so on. The laundry list of taxes is so long and complex that it is no longer possible to compute what the total tax level actually is for anyone.
And to this, we add the hidden tax of inflation. In the US, for example, the Federal Reserve has, over the last hundred years, devalued the dollar by 98%, a hefty tax indeed. And the US is not alone in this.
Only 50 years ago, the average man might work a 40-hour week to support a wife who remained at home raising the children. He often had a mortgage on his home but might have it paid off in ten years. He paid cash for nearly everything else that he and his family owned or consumed.
Today, both husband and wife generally must be employed full time. In spite of this, they can’t afford as many children as their parents could, and they generally remain in debt their entire lives, even after retirement. This is significant inflation by any measure.
In contrast, in the Middle Ages, the cost of goods might remain the same throughout the entire lifetime of an individual.
In light of the above, the 10% that was paid by the serfs is beginning to look very good indeed.
However, the great majority of people in the First World are likely to say, “What can you do; it’s the same all over the world. You might as well get used to it.”
Well, no, actually, it’s not. There are many governmental and economic systems out there and many are quite a bit more “serf friendly” than those in the major countries.
Countries such as the British Virgin Islands, the Cayman Islands, Bermuda and the Bahamas have no income tax. Further, some have no property tax, sales tax, capital gains tax, value added tax, inheritance tax, and so on.
So how is this possible?
The OECD countries state that it is largely accomplished through money laundering, but this is not the case. In fact, low-tax jurisdictions are known to have some of the most stringent banking laws in the world.
The success of these jurisdictions is actually quite simple. Most of them are small. They have small populations and therefore need only a small government. Yet each jurisdiction can accommodate large numbers of investors from overseas. This results in a very high level of income per capita.
But unlike large countries, the money that is deposited or invested there is overseas money, so it is not captive. Investors can transfer it out overnight if need be.
So, even if the politicians are no better than those in larger countries (generally, they are of the same ilk), they’re aware that, like the noblemen of old, if they attempt to impose taxation, the business will dry up quickly.
In fact, such a free market dictates that the jurisdictions keep on their toes and keep trying to outdo their competitors by being more investment friendly.
Therefore, the politicians in these countries, who might be only too happy to promise entitlements to their constituents, then tax them to the hilt in order to pay for the entitlements, are kept restrained by their own system.
Are there downsides to living in a low-tax jurisdiction? Yes.
As most of them are small but require a very high standard of living in order to attract investors, they must import virtually all goods needed by residents. This means a higher cost of all goods, as compared to the cost in a country that produces such goods. However, the wage level is also higher, which tends to balance out the equation.
But there are also upsides.
Those who move to such a jurisdiction find that after the first year there (when the basics such as cars, televisions, etc., have been paid for), all further income that has been saved from taxation is beginning to get deposited in the bank.
At some point, the deposit level becomes great enough that investment becomes advisable. And as low-tax jurisdictions tend to be naturally prosperous, there is generally no limit to the opportunities for investment within the jurisdiction.
There is a further benefit to living in a low-tax jurisdiction that tends to become apparent over time. Any government that depends on major investments from overseas parties must, of necessity, be non-intrusive and non-invasive. Such a government stays out of people’s business, eschews electronic monitoring and most certainly is not given to SWAT teams crashing down doors for imagined wrongdoing.
Benjamin Franklin famously said, “Nothing can be said to be certain, except death and taxes.”
He was correct, but the level of tax can vary greatly from one country to the next. And just as important, the level of government intervention into the affairs of its citizenry varies considerably. In a country where the level of tax is low, the quality of life is generally correspondingly high.
A thousand years ago, noblemen, from time to time, became overly confident in their ability to keep the serfs on the farmland and demanded taxes beyond the customary “one day’s labour in ten”. When they did, the serfs of old often voted with their feet and simply moved. Today, this is still possible.
If the reader presently contributes more than one day’s labour in ten to his government, he may wish to consider voting with his feet.
You can find out more about our favorite jurisdictions in our free documentary video. Click here to watch it now.
When China’s equity bubble burst and the SHCOMP tumbled unceremoniously back to earth on the back of a harrowing unwind in the half dozen or so backdoor margin lending channels that had served to pump CNY1 trillion into an already inflated stock market, Beijing went looking for scapegoats. The ensuing crackdown on “malicious” sellers and “hostile foreigners” as well as a directive to reporters to avoid using certain phrases such as “rescue the market” served as poignant reminders to the world that although China is indeed making small steps towards liberalizing its markets, outcomes deemed undesirable by the Politburo will be “corrected” – and right quick.