THE BEADY EYE ASK: JUST WHAT IS INFLATION IN ECONOMIC TERMS?

11 Saturday Jun 2022

Posted by bobdillon33@gmail.com in #whatif.com, Inflation

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An economist will tell you that inflation is the term used to describe the general rise in the price of goods and services over a certain period. Put another way, inflation is when money loses value over time.

I SAY THERE IS MORE TO IT THAN THAT.

Inflation doesn’t impact all consumers equally but plays a significant role in an economy by redistributing wealth, with consumers becoming poorer, limiting their disposable income.

Ever since the pandemic outbreak, the woes of the common man have been multiplying every day with gas and energy price increases leading the way to higher inflation with no gaps to stop it.

We and governments are unable to cut short our expenses so there’s a domino effect with the UK going through a ringer, especially when it comes to its economy.

A combination of Quantitive Easing, Brexit, the Pandemic, the Ukrainian-Russian war, and Supply/demand shortages, not to mention other hair brain projects have all added to inflation.

It certainly appears that things are going to get worse. Maybe much worse, so what can be done?

Much of the economy depends on consumer confidence, right?

We can agree that a healthy economy is the only solution to maintaining or gaining a better standard of living for everyone. Without that, we can forget about solving any “existential problems.”

Taxpayers already toil half their working lives just to pay off the taxman.

Governments get their revenue from taxation.

It’s been calculated that tax revenue will total £873 billion in 2020/2021, £63 billion more than in 2019/2020 (£810 billion). Public spending is expected to be £928 billion, £86 billion more than it was last year (£842 billion). This is £55 billion more than what the tax revenue will be this year.

The Covid-19 pandemic resulted in very high levels of public spending. Current estimates of the cost of Government measures announced range from about £310 to £410 billion. This is the equivalent of about £4,600 to £6,100 per person in the UK.

Yet taxes should be transparent and understandable. But how many people know how much tax is on a pint of beer? Or a flight to Marbella? Or a liter of petrol? Having so many different indirect taxes removes transparency and makes ethical decision-making more difficult.

Currently, 31.4 million must file an often complicated tax return. Turning up the tax heat in the UK

In the United Kingdom, the value-added tax or value-added tax, VAT was introduced in 1973, replacing Purchase Tax, and is the third-largest source of government revenue, after income tax and National Insurance.

As VAT is levied on revenues and not profits it harms low-margin businesses disproportionately. As any fool knows, the first principle of VAT is that you should be able to calculate it in your head.

It is the one stealth tax that the right doesn’t seem to mind.

It seems that this tax is the wrong way round.

We shouldn’t be taxing businesses that add value, but those that do not.

For instance, are Internet sales taxable?

Here is the problem. Knowing and understanding are two different things.

There are two different sorts of inflation.

Demand-pull inflation is when demand for a particular product or service outstrips supply, forcing businesses to raise costs.

This combined with Cost-push inflation is caused by the rise in raw materials prices.

We know that capitalism for profits is out of control.

We know that what’s vital is for people to feel empowered to hold corporations accountable but don’t hamstring them.

We know that government interventions lag behind what is needed and this puts additional strain on businesses that will start the cycle again by laying off more workers.

We know that the latest inflation surge is primarily driven by soaring energy and fuel prices and the war in Ukraine also pushing food prices higher and the Russia-Ukraine conflict is expected to drive these even higher.

We know that tax reform is now essential and the question is whether the various tax reliefs that people currently enjoy are ‘fit for purpose. The ever-widening gap between the nations’ income from tax take and expenditure on social and health care now makes a review an imperative to put the UK’s public finances back on a more sustainable footing.

We know that the National Debt has steadily grown as a result of essential expenditure during both war and peace, and the payment of ‘interest’ on it has long been an unavoidable item of annual expenditure

“Taxation is the price we pay for civilization.” Taxation represents the replacement of the handshakes of commerce with the threat of force as an instrument for human governance.

Taxation is an instrument in a continuing war over how human relationships are to be constituted.

As taxation recedes, handshakes and promises become more prominent in human governance. As taxation expands, duress, threats, and force take on greater significance.

Because the mere possession of the power to employ force almost inevitably expand its use beyond its necessary limits

If taxes were replaced by voluntary contributions, it would be impossible for anyone to claim that the state was involved in expropriating private property. At the same time, it is argued, that people would have strong incentives to take free rides on the contributions of others. As a result, services such as civil order and national security, which we all value, are likely to be underfunded.

A central tenet of democratic ideology is the belief that taxation is something we do to ourselves for our common benefit and nondiscriminatory taxation impedes efforts to use taxation to reward or punish certain forms of activity. Yet a great deal of tax legislation rewards or punishes specific forms of activity.

Once a government acquires the power to reward or punish particular types of activity, the principle of broad-based, nondiscriminatory taxation quickly evaporates under the heat of politics. The result is unlimited power to tax, where the only limit on the reach of the tax collector is the pragmatic one of political pressure and votes.

|s there any solution?

What are all benefits that were withdrawn over a period of ten years and replaced by a basic living wage?

The vat was replaced by a sales tax not applicable to essentials. Sales tax hits consumption instead of income. That means we’ll consume less and thus decrease the national carbon footprint.

Then at least people would have the power over where when and how they spend.

“Taxation is theft”

When the government plans to spend money on something (support for the arts, a space program, a national retirement program, and so on), one should ask: would it be permissible to steal from people in order to run this sort of program? If not, then it is not permissible to tax people in order to run the program, since taxation is theft.

As we see over and over allowing some individuals to assume the role of a government, possessed of the unique powers associated therewith, is unlikely to compel those individuals to act more nobly or selflessly.

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THE BEADY EYE SAY’S : Where will we be in six months, a year, ten years from now?

31 Tuesday Mar 2020

Posted by bobdillon33@gmail.com in 2020: The year we need to change., Artificial Intelligence., Capitalism, Climate Change., CORONA VIRUS., COVID-19, Dehumanization., Democracy., Digital age., Disconnection., Environment, Evolution, Fourth Industrial Revolution., HUMAN INTELLIGENCE, Human values., Humanity., Inequality, Life., Lock Down., Modern day life., Our Common Values., Political Trust, Politics., Populism., Post - truth politics., Poverty, Reality., Survival., Sustaniability, Technology v Humanity, The common good., The Future, The Internet., The Obvious., The pursuit of profit., The state of the World., The world to day., Truth, Truthfulness., Unanswered Questions., VALUES, Wealth., WHAT IS TRUTH, What Needs to change in the World, Where's the Global Outrage., World Economy., World Organisations., World Politics

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( An essential twenty-minute read)

It all depends on how governments and society respond to coronavirus and its economic aftermath.

As we know COVID-19 is highlighting serious deficiencies in our existing system.

Hopefully, we will use this crisis to rebuild, produce something better and more humane. But we may slide into something worse.

My focuses on this post are on the fundamentals of the modern economy: global supply chains, wages, and productivity.

I argue that we will need a very different kind of economics if we are to build socially just and ecologically sound futures.

In the face of COVID-19, this has never been more obvious.

——————————————————————————————–

The COVID-19 pandemic is simply the amplification of the dynamic that drives other social and ecological crises: The prioritisation of one type of value over others.

From an economic perspective, there are four possible futures:

Descent into barbarism, robust state capitalism, radical state socialism, and a transformation into a big society built on mutual aid.

Coronavirus, like climate change, is partly a problem of our economic structure. Although both appear to be “environmental” or “natural” problems, they are socially driven.

Yes, climate change is caused by certain gases absorbing heat. But that’s a very shallow explanation. To really understand climate change, we need to understand the social reasons that keep us emitting greenhouse gases.

Likewise with COVID-19. Yes, the direct cause is the virus. But managing its effects requires us to understand human behaviour and its wider economic context.

Tackling both COVID-19 and climate change is much easier if you reduce nonessential economic activity.

The epidemiology of COVID-19 is rapidly evolving. But the core logic is similarly simple. People mix together and spread infections.

We can see from Wuhan that social distancing and lockdown measures like this are effective.

Political economy is useful in helping us understand why they weren’t introduced earlier in European countries and the US.

We are now facing a serious recession and we are living with an economic system that will threaten collapse at the next sign of pandemic.

The economics of collapse is fairly straightforward.

Businesses exist to make a profit.

If they can’t produce, they can’t sell things. This means they won’t make profits, which means they are less able to employ you.

Businesses can and do (over short time periods) hold on to workers that they don’t need immediately: They want to be able to meet demand when the economy picks back up again. But, if things start to look really bad, then they won’t. So, more people lose their jobs or fear to lose their jobs. So they buy less. And the whole cycle starts again, and we spiral into an economic depression.

In a normal crisis, the prescription for solving this is simple.

The government spends, and it spends until people start consuming and working again.

This pressure has led some world leaders to call for an easing of lockdown measures.

But normal interventions won’t work here because we don’t want the economy to recover (at least, not immediately). The whole point of the lockdown is to stop people going to work, where they spread the disease.

If we want to be more resilient to pandemics in the future (and to avoid the worst of climate change) we need a system capable of scaling back production in a way that doesn’t mean loss of livelihood.

At its core, the economy is the way we take our resources and turn them into the things we need to live.

Looked at this way, we can start to see more opportunities for living differently that allow us to produce less stuff without increasing misery.

So how do you reduce the amount of stuff you make while keeping people in work?

You have to reduce people’s dependence on a wage to be able to live.

Currently, the primary aim of the global economy is to facilitate exchanges of money. The dominant idea of the current system we live in is that exchange value is the same thing as use-value.

This is why markets are seen as the best way to run society. They allow you to adapt, and are flexible enough to match up productive capacity with use-value.

What COVID-19 is throwing into sharp relief is just how false our beliefs about markets are.

There are lots of contributing factors to this. But let’s take two.

First, it is quite hard to make money from many of the most essential societal services-key workers low-paid employee. This is in part because a major driver of profits is labour productivity growth: doing more with fewer people – automation.

Second, jobs in many critical services aren’t those that tend to be highest valued in society. Many of the best-paid jobs only exist to facilitate exchanges; to make money.

People are compelled to work pointless jobs (they serve no wider purpose to society: ie. consultants, huge advertising industry and a massive financial sector) because, in a society where exchange value is the guiding principle of the economy, the basic goods of life are mainly available through markets.

This means you have to buy them, and to buy them you need an income, which comes from a job.

Meanwhile, we have a crisis in health and social care, where people are often forced out of useful jobs they enjoy because these jobs don’t pay them enough to live.

While state-capitalist society continues to pursue exchange value as the guiding light of the economy. It also enacts a massive Keynesian stimulus by extending credit and making direct payments to businesses.

The expectation here is that this is will be for a short period.

Could this be a successful scenario?

Possibly, but only if COVID-19 proves controllable over a short period.

Limited state intervention will become increasingly hard to maintain if death tolls rise.

Increased illness and death will provoke unrest and deepen economic impacts, forcing the state to take more and more radical actions to try to maintain market functioning.

Barbarism is the future if we continue to rely on exchange value as our guiding principle and yet refuse to extend support to those who get locked out of markets by illness or unemployment. It describes a situation that we have not yet seen.

Could this happen?

The concern is that either it could happen by mistake during the pandemic, or by intention after the pandemic peaks.

Potentially just as consequential is the possibility of massive austerity after the pandemic has peaked and governments seek to return to “normal”.

This would be disastrous. The subsequent failure of the economy and society would trigger political and stable unrest, leading to a failed state and the collapse of both state and community welfare systems.

Then there is the possibility that we could see with a cultural shift that places a different kind of value at the heart of the economy.

The state steps in to protect the parts of the economy that are essential to life: so that the basic provisions of life are no longer at the whim of the market. The state nationalises hospitals and makes housing freely available. Finally, it provides all citizens with a means of accessing various goods – both basics and any consumer goods we are able to produce with a reduced workforce.

Citizens no longer rely on employers as intermediaries between them and the basic materials of life.

Payments are made to everyone directly and are not related to the exchange value they create.

Instead, payments are the same to all (on the basis that we deserve to be able to live, simply because we are alive), or they are based on the usefulness of the work.

A Basic Universal Income.

Supermarket workers, delivery drivers, warehouse stackers, nurses, teachers, and doctors are the new CEOs.

If deep recessions happen and there is a disruption in supply chains such that demand cannot be rescued by the kind of standard Keynesian policies we are seeing now (printing money, making loans easier to get and so on), the state may take overproduction.

There are risks to this approach – we must be careful to avoid authoritarianism. But done well, this may be our best hope against an extreme COVID-19 outbreak.

Mutual aid is the second future in which we adopt the protection of life as the guiding principle of our economy. But, in this scenario, the state does not take a defining role. Rather, individuals and small groups begin to organise support and care within their communities.

The most ambitious form of this future sees new democratic structures arise. Groupings of communities that are able to mobilise substantial resources with relative speed. People coming together to plan regional responses to stop disease spread and (if they have the skills) to treat patients.

This kind of scenario could emerge from any of the others.

What hopefully is clear is that all these scenarios leave some grounds for fear, but also some for hope.

The upside of this is the possibility that we build a more humane system that leaves us more resilient in the face of future pandemics and other impending crises like climate change.

A key task for us all is demanding that emerging social forms come from an ethic that values care, life, and democracy.

The central political task in this time of crisis is living and (virtually) organising around those values.

Not low-paid workers or National Minimum Wage or National Living Wage because their work is so vital.

Successive governments had failed to reduce inequality between rich and poor despite two decades of interventions.

We must now with an uncertain future focus more on the journey, rather than the ultimate destination.

But be no doubt that we are at a crossroad where the low pay culture that has trapped people in poorly jobs is coming to an end.

Capitalism Inequality can not be allowed to continue.

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THE BEADY EYE OBSERVES WHAT TECHNOLOGY IS DOING TO THE PURSUIT OF PROFIT.

05 Tuesday Nov 2019

Posted by bobdillon33@gmail.com in 2019: The Year of Disconnection., Algorithms., Artificial Intelligence., Capitalism, Climate Change., Fourth Industrial Revolution., Inequality, Modern day life., Our Common Values., Politics., Reality., Sovereign wealth fund, Technology, The common good., The pursuit of profit., The state of the World., The world to day., Unanswered Questions., Wealth., WHAT IS TRUTH, What Needs to change in the World, Where's the Global Outrage., WORLD POVERTY WHERE'S THE GLOBAL OUTRAGE

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( A twenty-minute read)

The Internet is an incredibly spectacular thing, and only now — after so many years — we are understanding its power.

In spite (and many times because of) all the social media and internet news, we tend to have a skewed view of the world around us.

But there is one thing that is certain.

It has given rise to highly profitable digital platform monopolies, ‘superstar firms’ which are able to use aggregation and analysis of data to make supernormal profits which are disappearing into the cloud.

But what’s really happening in the global economy?

These multi-conglomerations dominate not just the current digital markets but future ones in artificial intelligence and machine learning, with workforces which are relatively small proportional to value-added, putting downward pressure on labour’s share of income.

It is becoming easier and cheaper to replace human work by increasingly
capable robots and artificial intelligence, this automation will accentuate existing trends in the capital and labour shares.

Whatever the future path of the global economy, with growing automation in

the economies of the world substituting capital for labour more and more

of the wealthiest fortunes are held almost exclusively in financial assets.

—-

We’re not just entering into a period of severe distress with climate change

we are also entering a period of a new uneven distribution of capital

ownership that is now the driver of inequality.

It’s a “new, harsh reality”, ( from weapons of mass destruction, water crises, large-scale involuntary migration and severe energy price shock, extreme weather events, failure of climate change mitigation and adaptation, interstate conflict with regional consequences and major natural catastrophes) that the spending power of governments is dimensioning.

Most of us haven’t quite realized there is something extraordinary happening.

Isn’t it absurd that we, 7 billion of us living on the same planet, have grown further apart from each other? Everything is going through change and that most of us are unaware of that.

What sense does it make to turn your back on the thousands, maybe millions, of people living around you in the same city on the same planet in poverty?

You might be lead to believe that the Internet is taking down mass control and the small are no longer speechless. This might well be true when it comes to the rising failure of climate change mitigation and adaptation or if you look at the Arab Spring, Brexit, and the people’s climate revolution/ pollution.

But its not true when one looks at how and by whom the economy of the world that is driven by growth at all costs.

Why?

Because the natural resources industry is owned by sovereignty wealth funds with financial instability around the world as the net result.

But don’t panic.

With Climate change and Ai, and with all of us exchanging half-truths civilisation is in for a rough ride.

However, technological crises have yet to impact economies or securities in a systemic way.

Which panic button to press?

The only category not to feature in the above harsh realities is algorithm profit from profit technological that is spreading inequalities between individuals and families, between countries, generations and genders, as well as between people from different ethnicities and class backgrounds.

Fleckenstein – David Rosenberg’s Proposal To Print Trillions Of Dollars Is Not Helicopter Money, It’s Cold Fusion

Normally revenue, as you know, is generated by profit/taxes but most revenue sources are already accounted for in government budgeting except the supernormal profits made by in no particular order – Apple, Google, Microsoft, Facebook, Cisco Systems, Intel, to mention just a few.

It’s sometimes hard to fathom the sheer scope of profits made by the world’s most profitable companies.

1. Saudi Aramco: $304.04 M daily – Earns $1 M in 4.7 minutes
2. Apple: $163.1 M daily – Earns $1 M in 8.8 minutes
3. Industrial & Commercial Bank of China: $123.29 M daily – Earns $1M in 11.7 minutes
4. Samsung Electronics: $109.3 M daily – Earns $1 M in 13.2 minutes
5. China Construction Bank: $105.48 M daily – Earns $1 M in 13.7 minutes
6. JPMorgan Chase & Co.: $88.97 M daily – Earns $1 M in 16.2 minutes
7. Alphabet: $84.21 M daily – Earns $1 M in 17.1 minutes
8. Agricultural Bank of China: $83.99 M daily – Earns $1 M in 17.1 minutes
9. Bank of America Corp.: $77.12 M daily – Earns $1 M in 18.7 minutes
10. Bank of China: $74.59 M daily – Earns $1 M in 19.3 minutes

and these are not Sovereign Wealth Funds.

They exist somewhere between the murky grey of return-maximizing, mega-cap asset managers, and clandestine government agencies quietly used to further sovereign agendas.

It is estimated that SWFs combined to hold more than $7.4 trillion in AUM, (Assets under management) representing approximately 6% of global assets under institutional management.

And you wonder with government print trillions to stimulate sagging economies why the world is and still is in a state of meltdown not just climate-wise but capitalistic wise.

We now have both the EU and the UK floating the idea of establishing Citizens wealth funds.

The trouble is that existing wealth funds have already bought up most of the world. Latecomers like THE UK/EU will have nothing to invest in other than technologies that produce profits.

The character of a sovereign wealth fund depends on its purpose and is shaped by how it is capitalised and governed, how it invests its funds and how returns are spent.

A Sovereign Wealth Fund is a state-owned investment vehicle established to channel balance of payments surpluses, official foreign currency operations, proceeds of privatizations, government transfer payments, fiscal surpluses, and/or receipts from resource exports, into global investments on behalf of sovereigns and in the advance of goals that are not transparent.

Economic theory wise, it is important to understand that SWFs form part of their respective country’s total national capital base, where total national capital is defined as the total combination of net financial assets, total physical capital stock (e.g., real estate, machines, infrastructure), unexploited environment, human capital, and unexploited natural resources.

Commodity SWFs are financed from the proceeds of non-renewable commodity exports (oil, gas, precious metals), which grow the AUM base in times of high prices but destabilize their source economies and budgets in times of low. Non-commodity funds, on the other hand, are typically financed from currency reserves or current account surpluses, driven by corporate or household saving rates.

They were once the mainstays of the global investment landscape.

Despite is name the era of neoliberalism was far from liberal.

We are now experiencing the political consequences of this great deception with the rise of popularism.

This blog has been suggesting for some time the setting up of a perpetual funded World Aid fund by applying a 0.05% commission on all profit for profit sake seeking financial activities. ( See previous posts)

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THE BEADY EYE ASK’S: WHAT DO HEATHROW- GATWICK- THAMES WATER- BLACK CABS, AND 73-89-355-361 OXFORD STREET HAVE IN COMMON.

30 Wednesday May 2018

Posted by bobdillon33@gmail.com in Brexit v EU - Negotiations., Brexit.

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( A Fifteen-minute read)

THEY ARE ALL OWNED BY SOVEREIGN WEALTH FUNDS.

While Dads Army negotiates the UK way out of the EU, 97 sovereign investors — state pension funds, central banks, and government ministries are collectively holding $12tn of British assets.

The invisible hand of capitalism has the UK by the short and hairs.

We are a stone throw away from a crucial point in the current Brexit negotiation, should those who own Britain be nervous.

Given the uncertainty over taxes on imports and market access, when you wake up one morning and your investment is worth 20 percent less than the previous day, that’s going to have an impact on investors who are starting to question the future of Britain as an ‘investment hub’ in Europe.

The gap between the rhetoric of the economic recovery and Brexit negotiations is beginning to make the young of Britain to reject the status quo.

We live in an era where heated rhetorical battles are fought over terms that have lost clear meaning.

It is this morass rhetorical debate that defines what is wrong not just with Brexit but what is wrong with capitalism and socialism.

There is no need for a referendum or survey to tell you the truth. You don’t need jargon or ideology for a case against the status quo.

Surely it’s time for England to focus its imagination on not making the past more beautiful than it ever was, rather than imagining a better future by focusing on what is truly critical.

The creation of real stakeholders in the country. Not just the rich but among it’s poor.

The big misconception of the EU is that it has to do with money.

All knowledge centers must be connected together to imagine a world in new and exciting ways.

Walling yourselves in for personal security and economic security will be a disaster in waiting.

Before Brexit barely a day went by without a major multi-billion dollar fund from one petro-state or another making some splashy acquisition.

You could say that London financial center for all attentive purposes turned a blind eye to – from – why – where or how the money was acquired.

Chinese: firms bought up British assets worth $11.3bn (£9bn) last year and have spent nearly $50bn in the last decade on acquisitions into the country.

Norway: It bought 73-89 Oxford Street — a development currently under construction — for £276.5 million and spent a further £124 million buying 355-361 Oxford Street.

The Norwegian fund — which is worth roughly £720 billion — already had a significant footprint in London, and owns a 150-year lease on roughly 25% of Regent Street, another of London’s most recognizable shopping streets.

The fund also owns parts of New Bond Street, properties on Savile Row, the street famous across the world for its tailors.

Outside London, it owns half of Sheffield’s Meadowhall shopping center.

As well as spending £400 million in London, the Norwegian fund bought a €1 billion (£850 million) office development in Paris and spent around $665 million (£534 million) on office spaces across New York, Washington DC, and San Francisco. It also purchased two further UK properties for a combined £5.7 million, with one retail unit, and one described as being used for “logistics.”

It also has 70 percent stake in five properties in Tokyo, Japan.

Saudi Arabia’s sovereign wealth fund Public Investment Fund, known as PIF, is turning the PIF into a global giant by giving it ownership of state-owned oil company Saudi Aramco, which is preparing for what could be the world’s biggest IPO.

The PIF is also behind several large real estate developments in the kingdom, including a new city called Neom that will be built on the Red Sea Coast, an entertainment city on the edge of Riyadh and another tourism project on the Red Sea.

The fund is also an investor in some of the kingdom’s largest firms, including Saudi Telecom Co., Saudi Arabian Mining Co., and National Commercial Bank. It also took a 16.32 percent stake in Almarai Co., the country’s biggest dairy producer, last year as the government supports national companies and develops them into regional and global leaders.

The UK will need inward investment, particularly when it leaves the EU. The main problem is that these funds are lack transparency.

Sovereign Wealth Funds (SWFs) remain, significant investors, with the assets of the top 10 now amounting to c.$5.5trn.

At the macroeconomic level, the rise of SWFs illustrates the seriousness of current-account imbalances in the global economy that have their origin in the managed exchange rates operated by some of the countries in surplus.

The accumulation of reserves for investment by SWFs should not become an end in itself.

A more specific concern raised by SWF investment in equities relates to the opaque way in which some SWFs function and their possible use as an instrument to gain strategic control. This concern sets them apart from other types of investment funds. More specifically, there is unease that – whatever the original motivation – SWF investment in certain sectors could be used for ends other than for maximizing return.

For example, investment targets may reflect a desire to obtain technology and expertise to benefit national strategic interests, rather than being driven by normal commercial interests in expansion to new products and markets.

By the same token, holdings could influence decisions by companies operating in areas of strategic interest or governing distribution channels of interest to the sponsor countries.

More generally, business and investment decisions could be influenced by the political interest of the SWFs owners.

Although in most cases, SWFs are portfolio investors and have avoided taking controlling stakes or seeking a formal role in decision-making in companies, concerns have been raised about the possibility of SWFs seeking to acquire controlling stakes in companies.

National security considerations have been acknowledged by some SWFs owners, who request clarity and certainty about investments that can be made and which areas might be “off-limits” to SWFs.

Since SWFs are managed independently from a country’s foreign exchange reserves, they are excluded from transparency mechanisms.

While they have existed for more than fifty years, over the past decade they have rapidly expanded to become a source of investment of systemic importance. They can offer a source of investment and market liquidity at a time of real pressure. Yet, as state-owned investment vehicles, some can raise questions about the risk that these investments may interfere with the normal functioning of market economies.

The longer-term impact of Brexit cannot yet be seen but you may rest assured that it will have its pro and cons when it comes to SWF who sole purpose is to generate income.

However, they are only part of the mix when it comes to who owns what in the UK there is another Sovereign wealth fund called the crown.

The monarchy is still one of Britain’s most valuable institutions, with a value of £57 billion to the UK.

The 89-year-old’s estimated personal fortune, largely inherited from her family, is about US$425 million ($673 million), according to an analysis by the Bloomberg Billionaires Index. That’s a mere 3 percent of the wealth of the richest Briton, Gerald Grosvenor, the Duke of Westminster.

THIS IS SOME OF WHAT IT OWNS.

The Crown Jewels 140 ceremonial objects boasting a spectacular 23,578 precious gemstones

The Queen privately owns an 18,433-hectare estate called the Duchy of Lancaster.

It is administered separately from the Crown Estate. Part of that is the Savoy Estate, a stretch of prime real estate in central London which houses the iconic Savoy Hotel.

Sandringham House, an 8,000-hectare estate in Norfolk.

Balmoral Castle, 20,000-hectare Scottish estate.

The Duchy of Lancaster also holds around a dozen historic properties, including Lancaster Castle and Pickering Castle in Yorkshire.

The Duchy delivers an annual income of around £18 million ($25.5 million), which is paid directly to the ruling monarch.

Regent Street & St James’s Market, London: The Crown Estate owns the entirety of Regent Street in London, one of the UK’s best-known shopping streets. It also owns prime retail property across the UK in locations including Oxford, Exeter, Nottingham, Newcastle, Harlow, and Swansea.

The Crown Estate owns around 106,000 hectares of farmland across the UK.

The Crown owns the rights to salmon fishing and gold mining in Scotland.

Windsor Castle & Great Park, Berkshire: The 6,400-hectare Windsor estate in Berkshire is part of the Crown Estate’s portfolio.

The Crown Estate holds around 11,000 hectares of forestry in areas including Berkshire, Somerset, and the Cairngorms in Scotland.

The Crown Estate owns a £1.1 billion offshore energy empire which includes 30 wind farms.

The Crown Estate announced in June last year that it returned a record £328.8 million ($464 million) to the Treasury in 2016 as the value of the overall estate rose to an astonishing £13.1 billion ($18.5 billion).

England might do well to pay attention to Micheal Collins words.

I quote.

” The object in building up the country economically must not be lost sight of. The object is not to be able to boast of enormous wealth or of a great volume of trade for their own sake. It is not to show a great national balance sheet, nor to point to people producing wealth with the self- obliteration of a hive of bees. The real riches of the Irish nation will be the men and woman of the Irish Nation the extent to which they are rich in body and mind and character.”

Or perhaps both the EU and England should take a feather out of the way E Bay Works.

You are only as good as your product and feedback. E Bay did not just create an online market it created a self-governing community.

Apple has shifted its tax liability in the UK to Ireland.

Amazon dominates retail in the UK.

Google dominates the browser market

There are currently no less than 97,000 properties owned by foreign firms in England and Wales.

The NHS is increasingly being infiltrated by American health providers.

The major public utilities – energy, railways, and water – are all to a significant degree foreign-owned

Nuclear power stations are owned and managed by the French company EDF (something the French would never allow in their own country) and that Hinckley Point C is a joint French/Chinese project.

If there anything to be learned from the above it is that we have a clash of mindsets: one pragmatic, the other dogmatic.

Neither understands the other.

Those incompatibilities are being played out today in front of our very eyes in the phony war over the negotiation. The EU is still of the belief that it runs the negotiation. It will not show flexibility because that’s not how it works. The UK, on the other hand, will not do as it’s told. That’s not how the UK works.

It will not comply with the EU’s negotiation strategy of meekly signing up to a large financial settlement before being fobbed off with a lousy trade deal. The UK would rather be damaged than humiliated by the EU.

The EU believes it will win because it refuses to believe the UK will walk. It will sign whatever is put in front of it. But this is to make the exact mistake that it has always made; it’s a misjudgment of how UK politics work.

The clearest indictment of the status quo is the status quo itself.

The Basic necessities such as food shelter are what’s needed, not Aircraft carriers.

Britain has suffered from decades of under-investment in public infrastructure.

Britain has deep structural problems. Manufacturing has been hollowed out. The gap between the richest and poorest parts of the UK is wider than in any other major EU country.

An excessive reliance on consumer spending focused on the bigger picture:

The only choice in a subsequent referendum that would be acceptable to many citizens is that between what the UK and EU actually agree in the withdrawal agreement and no deal whatsoever.

There is today, a very real risk of a no-deal outcome. This would be a traumatic and disruptive exit and bad for both sides. We have to hope this doesn’t happen.

Each side truly believes the other is deluded.

We cannot retreat from the world. We have to make sure that we get the best of our imaginations – while not letting our imaginations get the best of us.

Another vote is inevitable.

THE BEADY EYE SAY’S IT IS TIME TO RETHINK OUR MEASUREMENT OF ECONOMIC GROWTH.

27 Friday Apr 2018

Posted by bobdillon33@gmail.com in 2018: The Year of Disconnection., Capitalism, Fourth Industrial Revolution., GDP., HUMAN INTELLIGENCE, Humanity., Modern day life., Our Common Values., Sustaniability, Technology, The cloud., The common good., The Obvious., The world to day., Unanswered Questions., Wealth., What Needs to change in the World

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Brexit v EU - Negotiations., Business and Economy, Capitalism, Capitalism and Greed, Distribution of wealth, GDP., Inequility, Visions of the future.

( A three-minute read)

Right now one of the reasons our economies have to grow is because of debt.

The global economic system runs on money that is itself debt.

GDP (gross domestic product) has outlived its usefulness as a metric of economic size and is it stoking social and environmental crisis by encouraging growth at any cost. Résultat de recherche d'images pour "picture of gdp per capita"

The kind of statistics we’ve used in the past just isn’t working anymore.

With the planet warming and some resources already exploited to near-exhaustion, including many fisheries, with technology removing trade agreements, (as companies and customers increasingly transact their lives in the cloud not to mention blockchains) we need something that accounts for such factors.

GDP can no longer measure the distribution of wealth within a country.

Even where there is growth, disenchantment with how it is shared out can be seen vividly in Brexit-bound Britain. Notably, So, while its total value can go up, gains are all too often skewed to top earners. Those lower down the ladder can fall further behind in relative terms.

It does not encompass the black market, omitting a huge source of activity and income in many developing countries, including in Africa and Latin America.

We’ve got to find another mechanism to include much bigger parts of the population, and use different metrics to measure the success of a country.

So, what are the alternatives to GDP?

The WEF this week proposed a broader measure of growth called.

The Inclusive Development Index (IDI) is an annual assessment of 103 countries’ economic performance that measures how countries perform on eleven dimensions of economic progress in addition to GDP. It has 3 pillars; growth and development; inclusion and; intergenerational equity – sustainable stewardship of natural and financial resources.

However for this to truly work countries would need to be liberated from the pressures to exploit their citizens in the hunt for income to repay debts and we would need to remove the creation of debt- based money.

Another word we would have to cancel the debt of sovereign nations and move the creation of money away from the state.

Of course in a capitalist world, this is unrealistic.

China alone owns– $1.168 trillion as of January 2018 of U.S. debt.

However, the European Union which is in need of reform could do a lot to liberate its members from the tyranny of growth.

Some creative long-term thinking is needed.

It could actively downgrade consumption, by banning advertising on mobile phones, I pads and Public place, all of which use manipulation of emotions.

It could write off a reasonable chunk of the Greek debt by spread it among its members in return for solar power.

It could turn the euro into real money by insisting that all banks in the European Union hold at least 50% reserves against money lent. 90% of the money circulating in our economies is created out of thin air. Banks lend it into existence.

It could create a basic minimum income by taxing all profit-seeking Algorithms.

It could tax plastic and sugar.

It could stop the farcical traveling circus which sees the European Parliament move between Brussels and Strasbourg every month.

It could set an example for the rest of the world.

Unfortunately, we are all to busy with I am alright Jack isolation syndrome – its grow or collapse.

All human comments appreciated. All like clicks chucked in the bin.

THE BEADY EYE SAYS: THE WORLD OF WORK IS IN A STATE OF FLUX.

14 Sunday Jan 2018

Posted by bobdillon33@gmail.com in 2018: The Year of Disconnection., Capitalism, Democracy, Freedom, Happiness., Innovation., Life., Modern Day Democracy., Our Common Values., Politics., Sustaniability, Technology, The common good., The essence of our humanity., The Future, The Obvious., The world to day., Wealth., What Needs to change in the World, Where's the Global Outrage., World Leaders, World Politics

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Artificial Intelligence., Business and Economy, Capitalism, Distribution of wealth, Greed, Inequility, Visions of the future.

( A Sixteen minute read)

How much stuff do we really need to lead a normal life?

Not as much as you might think.

Automation, digital platforms, and other innovations are changing the fundamental nature of work.

You could say that: The world of work is in a state of flux.

There is growing polarization of labor-market opportunities between high- and low-skill jobs, unemployment and underemployment especially among young people, stagnating incomes for a large proportion of households, and income inequality.

However the field of robotics promises to be the most profoundly disruptive technological shift since the industrial revolution.

The development of automation enabled by technologies including robotics and artificial intelligence brings the promise of higher productivity (and with productivity, economic growth), increased efficiencies, safety, and convenience. But these technologies also raise difficult questions about the broader impact of automation on jobs, skills, wages, and the nature of work itself.

Somehow, we believe our livelihoods will be safe. They’re not:

Every commercial sector will be affected by robotic automation in the next several years. We have yet to reach the full potential of digitization across the global economy.

More than half the world’s population is still offline.

Greater interaction will raise productivity but require different and often higher skills, new technology interfaces, different wage models in some cases, and different types of investments by businesses and workers to acquire skills.

In a recent report, the World Economic Forum predicted that robotic automation will result in the net loss of more than 5m jobs across 15 developed nations by 2020, a conservative estimate. 40–50% of all jobs will be taken by robots in the next twenty years.

By 2025, average salaries in the robotics sector will increase by at least 60% – yet more than one-third of the available jobs in robotics will remain vacant due to shortages of skilled workers.

Developments in motion control, sensor technologies, and artificial intelligence will inevitably give rise to an entirely new class of robots aimed primarily at consumer markets. For example “Create Your Taste” kiosk – an automated touch-screen system that allows customers to create their own burgers without interacting with another human being.

The thing is: we’ve heard this all before. Time and time again, we underestimate capitalism’s extraordinary ability to come up with new meaningless jobs. (It’s 37% in the UK right now, but it could be 50%, 60% or even 100% in the future.)

Unless we update our ideas about what ‘work’ even is. The rise in the total of those employed is governed by Parkinson’s Law, and much the same whether the volume of work, were to increase, diminish or even disappear.

Labor which was once the capital of working men will be longer true.

Again: it’s not about the technology, it’s about the choices we make as a society.

When it comes to universal basic income: we don’t have to wait for the robots. We are more than rich enough to do it right now – in fact, we should have done it forty years ago!

Technology is not destiny, education is.

Everything depends on the choices that we make as a society.

If history is any precedent, we already know the answer.

MOST OF US ARE NOW SURROUNDED WITH A PORTION- DISTORTED EMBARRASSMENT OF NOT JUST FOOD BUT GOVERNMENT SIZE.

Guest Blog: Downsizing for Public Health

It’s time for taxpayers to remind themselves just how much the cost of government to run us is..

Let’s take the cost of running the UK as an example. Résultat de recherche d'images pour "pictures of house of parliament in london"

The House of Commons with 650 Mbps at £76,000 pa costing the tax payer £156 million a year.

Add in the £6.4m pa given to opposition parties (Short Money), and support items like IT, and the overall total for each MP goes up to £242,000 pa.

But that’s only part of the bill: we also need to add in the costs of running the Commons itself. According to the HoC Administration Resource Accounts 2006-07, those costs total £210m, which is a further £325,000 per MP.

Oops I nearly forgot the gold-plated final salary pension guaranteed by taxpayers.

The official cost of MPs’ pensions is under 12 per cent of their salary, after 11 per cent contributions from MPs themselves. This adds up to total pay and pension for an MP of £85,000 (their £76,000 salary and £9,000 pension).

So with 650 MPs, that means each one costs us £85,000 pa in salary, pension contributions and employment taxes. Those troublesome “staffing allowances” cost us an additional £57.9m pa- £90,000 for each MP. Then there’s incidental expenses, additional cost allowances, and travel expenses, totaling a further £30.7m (£48,000 each).

Then you have 814 unelected Peers in the House of Lords at £83,000 pa. Costing the tax payer £67,932,000 a year plus £462,510 in tax-free expenses. Members can claim £300 or £150 for every day they attend the House and undertake parliamentary work. The dining rooms and bars are all subsidised by the taxpayer.

Baroness Smith of Gilmorehill, who has claimed £220,000 of expenses over her 27 year career on the red benches, has never spoken in a debate.

The total cost of members’ allowances and travel is around £20 million per annum.

So reducing the size of the House by about 250 members would represent a significant saving to the taxpayer.

Then you have the Civil Service 418,343, (316,792 full-time and 101,551 part-time.) Gross annual earnings (excluding overtime or one-off bonuses) for Civil Service employees is around £25,350, pa.

You dont have to ask why people are lying on the floors of hospital corridors.

————————————————————————————————-

‘What do you do when there is nothing left to do?’

What should a government faced with an unmanageable level of unemployment do when conventional policy has failed to resolve the issue?’

Perhaps then a seemingly radical solution, such as universal basic income (UBI), becomes plausible. Universal Basic Income (UBI), a form of social security paid to individuals, not households. It is paid to everyone.

It would give individuals the freedom to say ‘yes’ to jobs. Individuals will not have to do that which they do not wish to do. Fewer people will engage in menial and unsatisfying work. Employers may be forced to increase the wages for underpaid or unpaid jobs.

UBI creates a floor (minimum level) on the income distribution curve, alleviates poverty, and gives bargaining power to the ones who have it least.

Forgetting about work for a moment (if you can), think about what you should do when your physiological needs are no longer a concern. If you’ve had a passion at the back of your mind then you might finally pursue it. If, on the other hand, you’ve passed life going from one kind of busy to another, then you might have missed opportunities to reflect and figure out what you would like to be doing. The cost of failure may have been too high if it meant putting you or your family’s livelihood at risk.

Assuming UBI ensures a basic livelihood for everyone in a community, do these citizens have a duty to give back by working? Do individuals have a duty to accept paid, available employment?

I would say Yes: Individuals should have a duty to do something, providing it is socially beneficial. There was something about people helping each other for its own sake that makes for a good society. A society is not well-functioning if it’s members are not interested in actively improving each other’s well-being.

Caring for the those who cannot care for themselves (such as the elderly, children and disabled). One could volunteer for various causes they care about, whether they be social, environmental, tech-related or so on.

Your recognition that you have alleviated the suffering of others might make you feel like you have done something meaningful.

UBI provides the opportunity for you to try contributing to your community in different ways. This freedom lets you find a way to contribute that is most satisfying for yourself.

It would remove fear replacing it with dignity.

UBI would also reduce the cost of citizens relying on the state for assistance.

There are many pending environmental crises hanging over us, but human wastefulness can be avoided. Can you imagine a world of 7.6 billion people no longer struggling for food or shelter and now focused on bettering the world for their children? That’s universal basic income. That’s a legacy we can all leave.

So why is it not being done?

Because it would downsize our consumerism lifestyle and remove inequality.

There is nothing more powerful than an idea whose time has come.

I can hear you saying where will the money come from?

Vat, Negative Interest rates, Earnings from investments, Decreasing militry spending, Sovereign wealth funds, etc.

It would ensure that the distribution of the fruits of technology advancement are distributed fairly.

As Jeremy Howard said: ” In a post-scarcity world , why hold back wealth from people just because they can’t provide labor inputs just to create wealth.”

All human comments and suggestions appreciated. All like clicks chucked in the bin>

THE BEADY EYE LOOKS AT WHAT IS BEHIND THE EUROPEAN COMMISSION ORDERED TO IRELAND TO CLAW BACK: Up to €13bn in tax from Apple?

01 Thursday Sep 2016

Posted by bobdillon33@gmail.com in Apple. Inc, European Commission., European Union., HUMAN INTELLIGENCE, The world to day., Unanswered Questions., Wealth.

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Apple. Inc, Business and Economy, Capitalism and Greed, Distribution of wealth, European Union, Global economic rules, Inequility, SMART PHONE WORLD, World aid commission

( A four minute read)

Be Aware of Invisibility; Afficher l'image d'origine

One bad Apple leads to another.

This decision by the European Commission has implications far beyond Europe Union it opens the hornet’s nest of Capitalism.

The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and up-end the international tax system in the process. Every company in Ireland and across Europe is suddenly at risk of being subjected to taxes under laws that never existed.

The Unelected European Commission has ruled that two tax rulings issued by the Irish tax administration on the tax treatment of Apple’s corporate profits represent illegal state aid under EU law.

Brussels has no power over corporation tax rates, which member states have always been able to set themselves. The commissioner is trying to make sure the single market function is maintained and member states do not win business at the cost of others’ tax base.
In practice such rulings destroy fair market competition and undermine the tax sovereignty of democratic states.

So why should Ireland take any notice.

Other than it is a huge sum – more than the €12.9bn annual government spending on the Irish health service and nearly one-third of Ireland’s total government tax revenue in 2015, which was €45.6bn.

It is also the equivalent of €2,830 for every one of Ireland’s 4.6 million population.

It is a potential windfall – but one that the Government does not want.

Under EU rules it would mean that – as it is a once-off payment – it would have to be used to pay down debt, rather than used to fund extra Government spending.

There is little point in the EU enforcing Ireland to issue Apple with a tax bill in order to recoup EU financial Aid.

So are we looking at Cowboy Capitalism.

We all know that the world economy needs to be fundamentally reformed and if let alone it will not right it’s self.

In light of the technological revolution which is going to make most of us unemployable, structural changes are needed to the soul less of systems, one in which the fortune of one individual is most often possible at the expense of another.

The real question is:

How can the tendency of modern-day capitalism ( which is producing high levels of inequality and unsustainable uses of limited resources) be rethought.

Simply put Capitalism ultimate goal is profit. I got mine so fuck you! approach to life.

Trickle down economics is a joke. Capitalism has produced a society which no longer focuses on cooperation but on individual gain at any cost. We live in a society that now prides profit over prudence, compulsively over compassion, technology over tactility. And not too far away Trump over truth.

Global economic rules allow jobs to be offshore and capital to be reallocated in ways that do not benefit the vast majority of people.

Division and fear are sown by our world media . Compliance and desperation are reaped. And as always , there’s a profit.

Soon we will have a generation that does not know anything that does not come out of a smart phone, the God that will make or break presidents, popes, prime ministers, European Union’s, etc.

The most awesome goddamn propaganda force in the whole godless world. Owned by Apple. Afficher l'image d'origine

We all know that it cannot remain the same and the core responsibility of democratic nations is to provide the ground rules. But should these rules be about how should technology best be deployed to serve human needs.

European feudalism failed a long time ago and now it seems that the European Union is also on the verge of failure.

Free enterprise and the market have led to private capitalism’s accumulation.

Capitalism’s problems are so deep that they are almost intractable, and benefits of private enterprise and markets against those of public enterprises and government planning have become blurred.

Giving that the European Union now has the apparatus to play a central role in the economy of its member has this decision reinforced an excessive concentration of power in politics and culture moving the EU to a state form of Capitalism which England recently voted to leave.

Once England it is outside the EU, Britain would have even more leeway than Ireland or other European Countries to offer special deals to multinationals in the hope they would invest in the UK.

That said, such moves could leave Britain looking more and more like a tax haven, and could hamper the willingness of other countries to trade openly with the UK.

With the way the Technological Revolution is going I would say FUNDAMENTAL REFORM IS NEEDED.

The thought that technology is innately progressive and all-powerful so it can solve capitalism’s problems for us by leaving firms and wealthy investors alone to do as they wish will ultimately leads all of us to greater insecurity.

The sheer trickery of Apple’s tax arrangements renders their claims to corporate social responsibility risible, and the economic harm caused by these arrangements is also enormous.

The evidence points in one direction Capitalism is the wrong economic system for the material world that is emerging.

It’s time to redesign.

There is only one way of resetting the elite-driven international capitalism.

All profit for profit sake should be caped with a world aid commission of 0.05%. ( See previous posts)

THE BEADY EYE LOOKS AT THE VALUE OF GOLD.

27 Tuesday Oct 2015

Posted by bobdillon33@gmail.com in The world to day., Wealth.

≈ Comments Off on THE BEADY EYE LOOKS AT THE VALUE OF GOLD.

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Business and Economy, Capitalism and Greed, Central Banks, Distribution of wealth, Gold., The Future of Mankind

Just what is the value of Gold.?

Humans have been decorating themselves with gold since at least 4000 B.C.

According to a 2011 paper in the Journal Nature: meteor bombardment nearly 4 billion years ago brought 20 billion tons of a gold-and-precious-metal-rich space rock to Earth.

Tracing gold’s origin back even further takes us into deep space.

A 2013 study in The Astrophysical Journal Letters found that all of the gold in the universe was likely birthed during the collisions of dead stars known as neutron stars.

Where ever it came from here are some hard facts.

Gold, the 79th element on the Periodic Table of the Elements, one of the more recognizable of the bunch.

Two-thirds of the world’s gold use to be mined in South Africa. It is now ranked sixth amongst gold producing countries.

Seventy-eight percent of the world’s yearly supply of gold is used in jewelry. The rest goes to electronics and dental and medical uses.

The atomic symbol of gold, Au, comes from the Latin word for gold, aurum.
Astronaut helmets come equipped with a visor coated with a thin layer of gold. The gold blocks harmful ultraviolet rays from the sun.
The world’s largest gold crystal is the size of a golf ball and comes from Venezuela. The 7.7-ounce (217.78 grams) crystal is worth about $1.5 million.
In Tutankhamen’s tomb alone they found that his coffin was made from 1.5 tonnes of gold.
Earthquakes can create gold.
The first purely gold coins were manufactured in the Asia Minor kingdom of Lydia in 560 B.C.
You can eat gold.
Gold is an excellent conductor of electricity and is very non-reactive with air, water and most other substances, meaning it won’t corrode or tarnish.
Gold nano particles are the only way some drug can work.
Gold is in our every day language.
If we emptied our bank vaults and jewelry boxes, we’d find no less than 2.5 million tonnes of gold in the world.
The US Geological Surveyestimates there are 52,000 tonnes of minable gold still in the ground and more is likely to be discovered.

She’s been as good as gold. He or she is a gold mine of information.

All that glistens is not gold.

He or she has a heart of gold. Sitting on a goldmine. You’re worth your weight in gold. He or she scored some Columbian Gold. He or She is a “gold digger.” He or he has a heart of gold. Go for the gold. Tickets are like gold dust. Strike gold.

User-friendly software is worth its weight in gold.

From 3600 BC to the present day, from deep underground to outer space, gold has been a major factor in the world’s development and economy.

When thinking about the historical progress of technology, we consider the development of iron and copper-working as the greatest contributions to our species’ economic and cultural progress – but gold came first.

Its association with the gods, with immortality, and with wealth itself are common to many cultures throughout the world.

But how did gold come to be a commodity, a measurable unit of value?

Gold, measured out, became money. Gold gave rise to the concept of money itself: portable, private, and permanent.

Gold (and silver) in standardized coins came to replace barter arrangements. The concept of money, (i.e., gold and silver in standard weight and fineness coins) allowed the World’s economies to expand and prosper.

A lot of people think about gold as a percentage of a country’s total reserves.

Between January 2000 and March 2009, central banks reduced their reserve holdings of gold by more than 114 million troy ounces.

You might be surprised to learn that the United States has 70 percent of its reserves in gold. Today, the US has about 8,000 tons.

The Bank of England held 5,485 tonnes of customer gold at the end of February 2014, and 6,240 tonnes of customer gold at the end of February 2013. This meant that between the two-year end dates, end of February 2013 to end of February 2014, the amount of gold in custody at the Bank of England fell by 755 tonnes.

Now only 500,000 bars in the entire London vaults system,500,000 bars = 6,250 tonnes. Gordon Brown sold more than half of Britain’s precious gold bullion at the bottom of the market just before the price of gold started a decade of almost uninterrupted growth.

It was invested in foreign currency interest-bearing assets, 40% in dollars, 40% in euros and 20% in yen.

Meanwhile, China only has about 1 percent of its reserves in gold.

The reason is that a country’s reserves are a mixture of gold and hard currencies, and the currencies can be in bonds or other assets.

The United States doesn’t need other currencies. They print dollars, so why would we hold euros and yen? The U.S. doesn’t need them, so it makes sense that the country would have a very large percentage of its reserves in gold.

China, on the other hand, has greater need for other currencies.

In a money economy, however, you can say that the country’s gold holdings are the real money.

The IMF officially demonetized gold in 1975. The U.S. ended the convertibility of gold in 1971. Gold disappeared “officially” in stages in the mid-1970s. But the physical gold never went away.

Russia has one-eighth the gold of the United States.

Once China gets the right amount of gold, then the cap on gold’s price can come off. At that point, it doesn’t matter where gold goes because all the major countries will be in the same boat. As of right now, however, they’re not, so China has though to catch-up.

So one of my questions for central bankers is, if gold is such a ridiculous thing to have, why are we hanging onto it?

Gold serves as political chips on the world’s financial stage. It doesn’t mean that you automatically have a gold standard, but that the gold you have will give you a voice among major national players sitting at the table.

China feels extremely vulnerable to the dollar. If we devalue the dollar, that’s an enormous loss to them.

China is saying, in effect, “We’re not comfortable holding all these dollars unless we can have gold. it’s going to be a mad scramble to get gold.

China, along with India, leads the world in gold demand.

1999 – First Central Bank Gold Agreement.

The First Central Bank Gold Agreement (CBGA) is agreed. 15 European central banks declare that gold will remain an important element of their reserves and collectively cap gold sales at 400 tonnes per year over next five years.

2004 – Launch of SPDR Gold Shares

The market is transformed by an innovative, secure and easy way to access the gold market. Seven years later SPDR exceeds $55bn in assets under management.

New York Gold Spot Price (24hrs)Oct 26, 2015 at 12:35 EST

Gold Price Per Ounce	$ 1,168.54	∧ 2.09
Gold Price Per Gram	$ 37.57	∧ 0.07
Gold Price Per Kilo	$ 37,569.43	∧ 67.2

The annual worldwide production of gold is something like 50 million troy ounces per year. In other words, all of the gold produced worldwide in one year could just about fit in the average person’s living room!

That means that if you could somehow gather every scrap of gold that man has ever mined into one place, you could only build about one-third of the Washington Monument.

When deciding on a gold jewelry item there are always many different terms that come up. The most popular are Solid Gold, Gold Filled, and Gold Plated. Solid gold is of course an exquisite piece of jewelry. Gold filled is the next level and is an amazing, quality alternative to solid gold. Gold plating is the lower level and these items tend to tarnish and can often times turn the skin green.

Pure gold is so soft, however, that it is rarely ever used to make jewelry. Most jewelry is made from a “gold alloy”.

24K gold is gold in its purest form without any other metal added (though even most 24K gold usually has minute traces of other metals in it. That’s why even fine gold bullion is labeled 99.999% Gold instead of 100% Gold).

Gold can be tested in several different ways. Acid Testing and X-Ray Fluorescence. They both have advantages and disadvantages.

Gold is an elemental metal. This means that pure gold is made up of nothing but gold atoms.

There’s just one problem with humanity’s continued love affair with gold: Getting it out of the ground. About 83 percent of the 2,700 tons of gold mined each year is extracted using a process called gold cyanidation, said Zhichang Liu, a postdoctoral researcher in chemistry at Northwestern University in Illinois. This process uses cyanide to leach gold out of the rock that holds it. Unfortunately, cyanide is toxic, and the process is anything but environmentally friendly.

In 2013 a bloke named Liu and his colleagues reported in the journal Nature Communications that they’d stumbled upon a way to extract gold from ore with benign starch rather than toxic cyanide.

There is about $130 billion in gold in Fort Knox.

The entire stockpile now weighs 147.3 million troy ounces, which is worth about $130 billion at today’s prices.

The bad news is that the way we use gold is starting to change.

Up to now it has never gone away. It has always been recycled.

“All the gold that has been mined throughout history is still in existence in the above-ground stock. That means that if you have a gold watch, some of the gold in that watch could have been mined by the Romans 2,000 years ago.” The way gold is being used in the technology industry, however, is different. About 12% of current world gold production finds its way to this sector, where it is often used in such small quantities, in each individual product, that it may no longer be economical to recycle it.

In short, gold may be being “consumed” for the first time.

Platinum is even more scarce than gold. Only 3.6 million troy ounces are produced per year.

WE LEFT WITH THE QUESTION WHY DO CENTRAL BANKS HAVE GOLD BARS IN THE VAULT?

It did sweet fanny Adam to stop the financial crash.

It’s a holdover from the old Gold Standards. Gold standard regulation required all banks, including the central bank to hold gold as a regulatory asset.

In the last gold standard, the Bretton Woods regime, the US in particular had to hold gold to back the dollar. The requirement went away with the collapse of the Bretton Woods agreement in 1973, but the gold didn’t.

These days there isn’t any requirement to hold gold. Gold on the Federal Reserve’s book isn’t even held at market prices, it’s marked to a notional statutory value of ~$42.

By the same token, there isn’t any requirement not to hold it.

“So why does anyone hold gold?”

It is expected to retain its value through cataclysmic events. The value of any currency, on the other hand, is dependent of the faith of the government or authority that backs it. The argument is that for some reason foreign markets become suddenly very adverse to take your currency, you should have some other medium of exchange that allow you to finance imports or serve short-term external debt.

All fiat currency is constantly competing with gold for value.

If everyone stopped creating money, and started hoarding gold, the central banks would, by definition be useless and powerless.

The trade-off between holding and selling the gold is different for “anyone” and countries.

Here a few Videos that are Gold.

THE FUTURE OF TAXATION.

02 Tuesday Dec 2014

Posted by bobdillon33@gmail.com in Uncategorized

≈ Comments Off on THE FUTURE OF TAXATION.

Tags

Business and Economy, Community cohesion, Consumption Tax, Distribution of wealth, Fiscal stimulus, Inequility, Inflation, ongoing Privatization of the world, Over-consumption, Political spectrum, Sovereign wealth fund, Tax, VAT, Wealth Tax

Tax Due Warning - A single, angled spotlight reveals a...

A common thief does not typically act with greater force or stealth.

I would guess like me you have tried to get your head around the taxes you pay without much success.

With the rising inequality concerns maybe it time you did as taxation has a future that will affect you and your love ones.

But where, and in what guise? Let’s have a look.

Slow population growth is depressing income growth, which leads to higher taxes.

Virtually every government could pay off its debts by taxing wealth.

Luckily for the rich such taxes are often politically unacceptable.

In other words, fiscal problems are best regarded as problems of dysfunctional governance by governments that are selling off state assets into Privatization until there will not be enough national wealth to pay off any debts.

Anyway for the purpose of this post it is essential that we try to appreciate the difference between real taxes and current (or nominal) taxes.

The real tax over any significant period is the level of government spending in relation to national output. The higher public spending as a percentage of GDP, the higher the real tax. That amount must in time be transferred from private to public hands—be it now or later.

The current tax, for its part, is the amount actually paid to a government in any given period, and is almost never equal to the real tax.

Got it. No. Shame on you. Try again.

A current tax lower than the real tax (that is, a public deficit) implies higher current taxes in the future, while a current tax higher than the real
tax (a public surplus—a phenomenon observable in only three of the past 50 years) implies lower current taxes in the future.

Now. You have.

So the stated political orientation of the administration presiding over a gap between current and real taxation—be it social democratic or of the supply side right—does not matter.

Because deferred taxes are simply claims against the public.

There are two ways to meet these claims:

1) higher current taxes in some future period or 2) inflating the claims away.

Inflation, which generally induces a shift of wealth from private to public hands, is the functional equivalent of a tax increase. These relations do not follow from any policy or ideology, but are purely matters of arithmetic.

Any clearer.? It’s of no matter.

Because what appears on the surface to be public debate over the appropriate level of taxation—and this goes on all the time—is in fact political maneuver by interested constituencies to get out of the line of fire of inevitable tax increases while deflecting the higher taxes onto someone else.

Now you have.

Different taxes do have different allocative effects.

Future taxes will perpetuate or even compound the misallocative effects of the present tax system.

Taxes in the next ten years, even though considerably higher than today’s, will nonetheless be insufficient, in all likelihood, to fill the revenue gap that opened wide during the last ten.

Inflation is all that remains to look forward to.

For a governments it will be like letting go to the pull of gravity.

Most wealth has already been subjected to income and other taxes, perhaps multiple times. It doesn’t seem fair to the holders of that wealth to suddenly pay additional taxes on assets that they thought were in the clear, and such taxes would signal that previous policy has failed.

It seems to me that on both ends of the political spectrum there is remarkably little concern with the allocative effects of taxation in its various forms.

However it matters how you tax if we are to halt the growing inequality in our life styles as over the next 10 to 15 years current taxes will increase mightily. Why? Because our own consumption, fueled by debt, outstripped our incomes in recent years, while foreign savers, predominantly from Asia/China/and the Far East financed the bulk of new investment in our economies.

Why aren’t foreign savers put off by double tax on capital income?

The answer is that they would be, if they paid it. But they don’t.

Another reason it that the massive fiscal stimulus that have been pumped into our economies by Quantitative easing and the selling off of state Assets (To Sovereign Wealth Funds, see previous posts) will in their wake pull up current taxes or spread inflation, another form of higher taxation —whether consumers or savers, suppliers of capital or suppliers of labor, or both in a maelstrom of inflation.

When income from labor is saved rather than consumed, the income from that saving (now capital income, in economic terms) is taxed again.

This “second” tax on saving makes the tax cost of capital income greater than that of labor income spent on immediate consumption. The two separate layers of income tax imposed on corporate earnings and then again on dividends distributed to shareholders actually imply a third tax on corporate profits. This goes far toward explaining why we don’t save.

What can be done:

What is needed is a shift in the burden of taxation away from capital income and onto consumption. In short, some form of consumption tax should be the predominant national tax.

The problem with a value-added tax is that people can to a considerable extent earn their incomes in one tax environment and spend them (either at retail on vacation or wholesale in retirement) in a different (and VAT-free) environment, so that ultimately both their incomes and their consumption are untaxed.

Value-added taxes and payroll taxes are analogous to an income tax that is imposed territorialy, whereas a tax on consumed income is imposed on worldwide income, minus the component of saving, and is therefore a tax on the worldwide consumption of a taxpayer.

(Turnover-type taxes such as sales taxes and value-added taxes are widely and correctly understood as consumption taxes. So is any tax that does not reach capital income.)

A tax on consumed income is an income tax in which personal saving is deducible from taxable income, thus excluding capital income and leaving only the amount of income that is consumed subject to current taxation.

In stead of contemplating such a tax in many EU Member States we got political, academic and public debate on wealth taxation which always gains traction in times of strained public finances.

The question is who ultimately bears the burden of wealth taxation (tax incidence)

The existence of a blurry frontier between capital and labor, income for the high-income earners, the role of transparency and automatic exchange of information in facilitating tax compliance and the serious political economy constraints makes any form of wealth tax unworkable.

Just imagine the difficulty to evaluate one’s wealth and the administrative costs along with the risks of tax evasion and capital flight.

Many people have become distressed about their taxes because they have been led to believe that the property they acquired would not he taxed to the extent that it has been. Accordingly, they have paid prices for the property that have reflected those expectations. They may be the reasons they are “mad as hell” simply because they feel that they have been misled by their government and that they not only have had to give up taxes but also have had to give up wealth in terms of reduced market prices for their property.

Economics have performed the heroic task of measuring wealth for eight leading economies: the United States, Canada, Britain, France, Italy, Germany, Japan and Australia.

Their estimates reveal some striking trends. For instance, wealth accumulation in these eight countries has risen relative to yearly production.

Wealth-to-income ratios in these nations climbed from a range of 200 to 300 percent in 1970 to a range of 400 to 600 percent in 2010. Behind the changing ratios is some bad news, namely that slow productivity growth and but also some good news — that relative peace and capital gains have preserved wealth up to now.

Virtual economies pose a real-world tax compliance risk, even if citizens aren’t purposefully shielding their money.

No one has a clue on how to manage the Planet. The only way forward is a consumption tax regime.

Sovereign Wealth Funds. Alarm.

30 Sunday Nov 2014

Posted by bobdillon33@gmail.com in Uncategorized

≈ Comments Off on Sovereign Wealth Funds. Alarm.

Tags

Business and Economy, Capitalism, Extreme poverty, Globalization, Government, Greed, Inequility, ongoing Privatization of the world, Privatization of the World., sovereign wealth funds (SWF), The European Union

<img alt=”” src=”http://media-cdn.tripadvisor.com/media/photo-s/04/79/29/e0/1728.jpg”/>
This photo of 1728 is courtesy of TripAdvisor

Its back to my hobby-horse the ongoing Privatization of the World.

It is of course is happening in a clever way, with very careful paperwork, so we have the option of pretending that it’s not actually happening, right up until the bitter end.

I often wonder is it just me. You barley hear a mummer about it from any other quarter. Other than Ireland where the population has woken up to the Privatization of water.

Perhaps it’s that no one gives a tosser.

That our Governments are systematically divesting themselves of bits and pieces of their own sovereignty, by transfer of assets and service functions from public to private hands.

It’s taking place all over the world without really anyone noticing it happening — often not even the people are asked to vote formerly on the issue.

It is my contention that it is the quality of the state rather than the fact that assets are owned by the state that matters more. In developing countries with extensive market and information failures the state should play an important role in promoting equitable development over the long run not sell of their assets to the highest buyers.

At the political level privatization has been challenged by workers affected by attendant retrenchments and the restructuring of internal and external labor markets consequent upon privatization that has resulted in increased worker vulnerability, and by consumers who have often been negatively affected by increased prices based on cost recovery pricing regimes instituted as a consequence of privatization, or by reduction in service provision arising from “efficiency enhancing” measures as a consequence of privatization.

No one knows precisely how much money is held by SWFs but it is estimated that they currently own $3.5 trillion in assets, and within one decade they could balloon to $10–15 trillion. (equivalent to America’s gross domestic product, an amount larger than the current global stock of foreign reserves of the USA which is about $5 trillion.)

Imagine the biggest and most aggressive hedge fund on Wall Street, then imagine that same fund is fifty or sixty times bigger and outside the reach of any other major regulatory authority, and you’ve got a pretty good idea of what an SWF is.

The rise of sovereign wealth funds (SWF) as new power brokers in the world economy can no longer be looked at as a singular phenomenon but rather as part of what can be defined a new economic world order.

This new order has been enabled by several mega trends which operate in a self-reinforcing manner, among them the meteoric rise of developing Asia, accelerated globalization, the rapid flow of information and the sharp increase in the price of oil by a delta of over $100 per barrel in just six years which is enabling Russia and OPEC members to accumulate unprecedented wealth and elevate themselves to the position of supreme economic powers.

It will not be long before transactions involving investment by sovereign wealth funds, as with other types of foreign investment, may raise legitimate national security concerns.

Concerns are growing that the purpose of the investments might be to secure control of strategically important industries for political rather than financial gain.

They on the other hand see themselves as passive, long-term investors, driven solely by the need to make a good return on their country’s surplus cash.

There is a degree of looking through the wrong end of the telescope to all this.

Sovereign wealth funds have with total assets estimated at $5.4tn as of October 2013. The funds have gained more than $750bn in additional assets since 2012 of which only $60 billion has gone to recent bank bailouts.

They are rapidly becoming owners of big chunks of American,the UK and Europe infrastructures.

Unlike the central banks of most Western countries, whose main function is to accumulate reserves in an attempt to stabilize the domestic currency, most SWFs have a mission to invest aggressively and generate huge long-term returns.

The origin of these SWFs is not even relevant, necessarily.

What is relevant is that these funds are foreign.

They are state-owned investment pools that thanks to a remarkable series of events in the middle part of the last decade they are buying up your governments services such as water treatment, parking meters, toll highways, rail links, ports, public infrastructure projects, commercial real estate all delivering a lot of cash into the coffers of sovereign wealth funds like the Qatar Investment Authority, the Libyan Investment Authority, Saudi Arabia’s SAMA Foreign Holdings, and the UAE’s Abu Dhabi Investment Authority.

Some recent activity:

(The first was the announcement that the Qatari royal family is planning a large investment in the controversial £50billion HS2 rail link, focused on a major new station and housing scheme in central Birmingham.

Qatar Investment Authority, one of the world’s largest sovereign wealth funds, is soon to table a new bid to take over Songbird Estates which owns the iconic Canary Wharf tower in east London, one of the best-known modern symbols of British capitalism.

Libya’s sovereign wealth fund is suing French bank Societe Generale in a British court for $1.5 billion for allegedly channeling bribes to allies of the son of slain dictator Muammar Qaddafi.

Iran’s President Mahmoud Ahmadinejad said on Saturday the country’s sovereign wealth fund could reach $55 billion by March next year if oil prices kept high.

Iran earned $100 billion in oil revenue in 2011. Iran is both the world leader in Shariah Compliant Finance and the world’s most active state sponsor of Jihadist terrorism.

Deutsche Bahn Seeks Sovereign Funds for the state-owned railway, is seeking to sell shares to sovereign wealth funds in the Middle East and Asia during the initial public offering. )

What is more to the point, is we’re being colonized/Privatized.

Industry today may not be regarded as such an industry tomorrow, and vice versa. Just look at the explosion of energy prices — thanks to a bubble that Western banks and perhaps some foreign SWFs had a big hand in creating.

Out side any regulation these funds are free to plunder the earth in the form of Hedge Funds( (which they have a bunch) with out anyone knowing who the funds investors are.

The point here is if these funds.

Are not regulated by the relevant international bodies determining which kinds of information about their balance sheets, management structures, investment objectives, portfolio breakdowns, and so forth should be supplied by sovereign wealth funds. The European Union could then put curbs on funds failing to comply with the standards for the publication of such information.

One way or the other they should be Capped ( See previous posts)

”

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Tag Archives: Business and Economy

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New York Gold Spot Price (24hrs)Oct 26, 2015 at 12:35 EST

THE FUTURE OF TAXATION.

Sovereign Wealth Funds. Alarm.

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But what’s really happening in the global economy?

Whatever the future path of the global economy, with growing automation in

the economies of the world substituting capital for labour more and more

of the wealthiest fortunes are held almost exclusively in financial assets.

—-

We’re not just entering into a period of severe distress with climate change

we are also entering a period of a new uneven distribution of capital

ownership that is now the driver of inequality.

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From 3600 BC to the present day, from deep underground to outer space, gold has been a major factor in the world’s development and economy.

New York Gold Spot Price (24hrs)Oct 26, 2015 at 12:35 EST

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