Saturday, August 31, 2013

USA, if you are not the policeman of the world, why should we hold so mindboggling many of your “In God We Trust” dollars?

My father, arriving as a polish prisoner on the first train to Auschwitz on June 14 1940, number 245, was liberated by the Americans from Buchenwald, April 14, 1945. So I might certainly be biased, in favor of the United States acting as the policeman for the world. At least biased in favor of the United States I believe existed, and still hope and pray for that exists. (So I guess I just confessed that I might not be the so "radical of the middle" on all issues.)

And that is why I keep on warning about that if the United States reneges on being the policeman for the world, or becomes ashamed of its strength, then the world might renege on trusting the US to such an extent as to hold a mind-boggling amount of its dollars, backed by a "In God We Trust". Approximately China holds $1.3 trillion, Japan $1.1 trillion and the rest of the world $3.1 trillion. And so you see, there might be quite a lot of subconscious quid pro quo involved here.

PS. Obama ended his September 10 speech saying “America is not the world’s policeman. Terrible things happen across the globe, and it is beyond our means to right every wrong. But when, with modest effort and risk, we can stop children from being gassed to death, and thereby make our own children safer over the long run, I believe we should act. That’s what makes America different. That’s what makes us exceptional. With humility, but with resolve, let us never lose sight of that essential truth.”

And frankly, to act only when only “modest effort and risk” is required, is not what has made America so great, at least not in the eyes of this small human being, who much owes his existence to the huge and brave sacrifices of America.

PS. It is also absolutely clear that Putin, when ending his Op-ed in the New York with “we must not forget that God created us all equal”, after referring to “big countries and small countries, rich and poor, those with long democratic traditions and those still finding their way to democracy”, has exclusively those who are governing the countries mind, those who so often shamelessly hide behind the skirts of sovereignty; and not for a second, not even remotely, is Putin thinking about the citizens who are governed, those who were the prime concern of America's founders.

And so, if "America is not the world’s policeman"...should Europe declare a state of emergency?

And please, if as a policeman, one one occasion, for your own reasons, want or need to restrict the punishment to something symbolic, is not that it is only symbolic, sort of the last thing you would want to say? 

And this is not the first time I have raised the issue of the dollar and America's military strength... and will to exercise it. Here in a letter in Washington Post

Oh, and just in case. I am not talking about a war against Syria, but a war against the use of chemical weapons.

And to fight and punish the use of banned chemical weapons, requires a willing, and, hopefully a strong, firm and good policeman, with a great sense of justice.

Or, are we telling our mostly dead grandfathers, their Geneva Protocol prohibiting chemical weapons was pure nonsense? Do we now want it repealed? I pray not.

And America, please do not confuse war with servicing as a police. A police detains when there are infractions… he does not build nations.

And if the United States is not willing to be the policeman of the world, to help enforce laws they have also agreed with, would the world have to pray for some vigilantes to do that?

Surely all human rights criminals who hide behind the skirts of sovereignty, must be celebrating the USA not wanting to be the policeman of the world! 

And in reference to the case of Syria, below I quote from “Questions about Syria you were too embarrassed to ask” by Max Fisher, The Washington Post, September 1, 2013 "What’s the big deal with chemical weapons?" 

"War is going to happen. It just is. But the reason that the world got together in 1925 for the Geneva Convention to ban chemical weapons is because this stuff is really, really good at killing civilians but not actually very good at the conventional aim of warfare, which is to defeat the other side. You might say that they’re maybe 30 percent a battlefield weapon and 70 percent a tool of terror. In a world without that norm against chemical weapons, a military might fire off some sarin gas because it wants that battlefield advantage, even if it ends up causing unintended and massive suffering among civilians, maybe including its own. And if a military believes its adversary is probably going to use chemical weapons, it has a strong incentive to use them itself. After all, they’re fighting to the death.

So both sides of any conflict, not to mention civilians everywhere, are better off if neither of them uses chemical weapons. But that requires believing that your opponent will never use them, no matter what. And the only way to do that, short of removing them from the planet entirely, is for everyone to just agree in advance to never use them and to really mean it. That becomes much harder if the norm is weakened because someone like Assad got away with it. It becomes a bit easier if everyone believes using chemical weapons will cost you a few inbound U.S. cruise missiles."

Sunday, July 07, 2013

What a sad bunch of “progressives”, and what a sad bunch of “free-market supporters”, you both groups are

Current capital requirements for banks favor the access to bank credit of “The Infallible”, like the sovereigns and the AAAristocracy, those already favored by markets, because they are perceived as “absolutely safe”; and thereby discriminate, odiously, against the access to bank credit of “The Risky”, like the small businesses and entrepreneurs, those already discriminate against by the markets, precisely because they are perceived as “risky”.

What a sad bunch of “progressives” you are, not caring about widening the gap between “The Infallible” and “The Risky”

What a sad bunch of “free-market supporters” you are, not caring about how the current bank regulations distort.

“Oh but it is all to make our banks safer” Bullshit! Our banks are never ever threatened by what is perceived as “risky”, only what is considered “absolutely safe” cause major crises.

To download the whole Journal of Regulation and Risk - North Asia, Volume V Issue II Summer 2013: here

Wednesday, July 03, 2013

Is not the interest that is not earned on public debt because of public policies a tax?

In terms of taxation, who is affected by a higher real tax rate?

Someone earning 5 percent in interest on public debt and, supposing a tax rate of 20 percent, then has to pay 1 percent in taxes, resulting in net earnings of 4 percent, or, 

Someone only earning only 3 percent on public debt, because of QEs, lower capital requirements for banks when lending to sovereign, and other fancy stuff causes lower interest rates on public debt.

You tell me, or better yet, tell them! on public

Monday, June 10, 2013

Should not capital, under some circumstances, also have the right to political asylum?

Sir, Philip Hildebrand, in “The Sheriff has spoken - and the Swiss must submit” June 10, discusses the recent US “ultimatum giving Swiss banks 120 days to hand over the identities of presumed US tax evaders”. And reaching his conclusion he bring up the image of John Wayne.

But, what if the Sheriff is not a good straight shooter like John Wayne, and the Sheriff works for a bandit? Just as individuals have a right to political asylum, should not capital have it?

Whatever the Swizz legislator comes up when creating the bridges necessary to solve the current impasse I sure hope somewhere somehow sets a very high bar for what a government has to do in terms of governability and fair treatment of its citizens, before it can apply for some information to be conveyed. And of course, what governments need to do in order to keep those rights. For instance some countries to not allow the expulsion of even convicted criminals if that could mean that a death sentence could be imposed on him.

I hope the US, and John Wayne, do not rush into a duel without giving full consideration to all its ramifications. In fact I wonder whether this is really an issue between governments, with their many conflicts of interests. Should it not be much more an issue between the citizens?

Thursday, May 30, 2013

On the voice of the indigenous

Just to be perfectly clear about it, I do not feel less indigenous to this planet than anybody else.

Wednesday, May 22, 2013

On a global scale, on an accumulated basis, there is certainly some need for tax-havens, meaning for some Sherwood Forests

Not everywhere, but truth is that in the majority of countries, the need of many citizens for a safe-haven, a Sherwood Forest, so as to escape from bad Prince Johns’ Sheriffs of Nottingham who, skimming them, just waste away fiscal income, surpasses by far the needs of all citizens for Robin Hoods able to skim some of the “filthy” rich. 

You have to make up your mind whether you are a Sheriff of Nottingham, or a Robin Hood, you can´t be both. 

Nothing as effective against tax-havens than tax-heavens

There is an underlying and never questioned premise that guides most discussions today, and that is… If all profits are taxed and all taxes are paid then the world is saved. 

I do not want to be a party pooper, and I definitely do not suggest, much less instigate, we should evade paying our taxes, but... are we really sure that a tax paid will be more productive than a tax withheld? 

What if we all have to go the route of an economia sommersa, and not pay taxes, in order for the world not to collapse? Do we not at least owe our children and grandchildren asking that question? So as to at least put some pressure on our governments?

There was a time when indeed a Robin Hood tax was contemplated but that has now only evolved into a vulgar Sheriff of Nottingham-Prince John tax. 

Thursday, May 09, 2013

The famous infamous progressive gap wideners.

Banks currently need to hold much more capital against exposures to “The Risky” than for exposures to “The Infallible”, and this even though “The Risky” already needs to pay higher interest rates, get smaller loans and accept harsher terms. That only hinders growth and widens the gap between the haves, the old, the history, the developed, “The Infallible” and the have-nots, the young, the future, the not developed, “The Risky”. 

Those who do not care about it, or even feel it is correct, are de-facto complicit of crimes against humanity

Among these we find some Nobel prize winners’ like Professors Joseph Stiglitz and Paul Krugman. 

In UK some banker's knighthoods are being recalled, perhaps some Nobel prizes should be recalled too.

You, the young, you need to denounce these stodgy aprės nous le déluge baby-boomers.

I tweeted as I have never done before

I have heard and read a bit here and there about “What happened in Benghazi?”, but I do not know sufficiently in order to have a firm opinion on it. Of course, for someone who comes from Venezuela, just the fact that there was a public congressional questioning on that issue, transmitted on TV, was something to marvel at. 

And I might have just been expecting too much, but when I saw one of the questioner, and I will not say who, seemingly doing the utmost to stir the questioning in such a way that nothing could come out of it, then I just felt such a deep disappointment that, like I never do, I shot out a barrage of #Benghazi tweets. 

Now the day after, from some distance, I am not sure I should have done that, though I suspect that, facing the same all over again, I would.

Saturday, March 23, 2013

Never make a rhetorical question on the web

You will get hundred of unwanted volunteers willing to answer it :-)

Tuesday, March 05, 2013

Hugo Chavez and the poor of Venezuela

Now upon his death, we often hear news-media reporting in reference to Hugo Chavez, that he helped to pull a lot of Venezuelans out of poverty. That is simply not true. 

Hugo Chavez did indeed help many poor to live better in poverty, good for him, but that is far different than pulling poor out of poverty. To do so exceeded by far Hugo Chavez’s capabilities, and that of his collaborators. 

Those Venezuelans who did manage to pull themselves out of poverty, did that entirely on their own, or with the help of oil revenues and corruption and very little else.

Monday, February 25, 2013

Who picks what is cut by "Sequestration 2013"?

Huffington Post sent me an amazing list of cuts in Maryland that “Sequestration 2013” would bring. Who picks some of these utterly dumb cuts? Is there not something more worthy of the ax?

Can the mighty US really crumble into pieces because of an $85bn lowering of its budgeted growing fiscal expenses? It could be, because from what I read everywhere, they seem to be intent to cut many of the last things that should be cut.

Sunday, February 03, 2013

The Nobel Prize Committee should do an ego check on the candidates.

Perhaps the Nobel Prize Committee should previously to awarding the Nobel Prize do an ego check. If the candidate is going to be humbled by the prize that is Ok but, if this is going to inflate his ego too much, it might better refrain from awarding him the prize. 

When I look around I find it amazing how often Nobel Prize winners, with egos inflated by the Nobel Prize so often opine straight bullshit, on issues completely outside of what made them be Nobel Prize winners, and even so are listened to, only because they are Nobel Prize winners. 

And this clearly creates more dangers than the benefits implicit in recognizing big minds.

Alternatively the Nobel Prize Committee should reserve itself the right to ask for the return of the Nobel Prize, though not the prize money.

Wednesday, January 16, 2013

The homeland defense

Recently, the commander in chief of the armed forces of Sweden opined his country could probably defend against a foreign invasion for about seven days. Seven days! No more? As you can imagine heated discussions began. 

As my mother is Swedish and therefore speculating I know something of the realities of this country, my first reaction was: It all depends on who the invader is. If for example Norway brought along the oil Sweden does not have, perhaps not even a single bullet would suffice, as no one would like to register the death of a single Norwegian soldier died. If instead the invader was the "archenemy" Russia, they may wish to have ammunition for 7 months, if for 7 or 70 years is not possible. 

And I wondered: For how many days are the military in Venezuela prepared to defend their homeland? I imagine that there the answer would depend on who answers ... and we might be better off not hearing it. 

Back to Sweden: If the preparation of the military is just for seven days, for how many days is the Swedish citizen willing to defend his country? I say this because this is as or even more important than the capacity of the military for the final result, and countries such as Sweden who have abolished compulsory military service, might be signaling some lack of wanting. 

And I ask: How many days would the Venezuelan be willing to defend? Would it be the same regardless of whether the invader is Brazil, Colombia, Cuba, the United States, Russia or China? 

Getting back to Sweden: Today, what means preparing for war? I ask this because if I were Defense Minister of a country, before asking more from the military, I would perhaps wish to prohibit all youngsters between 11 and 18, during one full year, to use all modern digital communication tools. And this in order to make them learn about the real world, in a real way and not only by virtual means. For example so they learn to orient themselves with a compass and must not always depend on a GPS to tell them where they find themselves.

And I wondered: what does it mean in Venezuela to defend the country from a foreign invasion, when we can’t even defend the access of our youth to their own streets, leaving these in the hands of the underworld? 

Back to Sweden: And are the territorial boundaries the most important frontiers to defend? What about communication boundaries, or regulatory boundaries? A country such as Sweden which became what it is because of the ability and willingness of its citizens to take risks, and in whose churches they prayed "God make us daring", now, and without realizing it, has allowed all its banking system to be invaded by a Basel Committee which with its regulations imposes a stupid aversion to what they perceive as risky. What can be more risky for a country than an exaggerated risk aversion? 

And I wondered: And are the borders of our land really so important when some military and some civilian, without one single bullet, seem willing to give up so much of our national sovereignty to another country? 

And I calmed myself somewhat by thinking that in truth seven days are few and insufficient days, only if the invader’s invading capacity is of eight days or more. 

PS. By the way my mother does not harbor any fear that hordes from the Venezuelan plains, commanded by a Genghis-Zamora-Khan, would invade Sweden. Phew what a relief!

Translation from El Universal, Caracas

Saturday, January 05, 2013

Negotiations at the Fed’s pawn shop

From what we hear some want the US government to go to the Fed’s-pawn-branch and pawn, for 1 trillion US$, a freshly minted commemorative platinum coin that has a face value of 1 trillion US$, and use the money to pay part of what it owes to the Fed. 

Some say that would not be inflationary since “none of the money represented by that coin could be spent until appropriations were passed by Congress and signed by the President.” 

Why did I not think of it before? I have an old beautiful and magnificent painting painted by an aunt of mine who passed away a long time ago, and which must be worth a real fortune. Why do I not take it to the bank and have them take it in partial payment of my credit card debt, so as to allow me some availability of funds under the debt ceiling they have imposed on me? In return, me and my wife would promise not to use that window of opportunity... except for things really important. 

Of course, if the transaction is carried out, both me and the bank must keep this very quiet since if my neighbors would find out, there could be a run on the bank, as they for sure would not want to run the risk of having their savings for their children being paid back tomorrow with that old lousy ugly painting that I have had to keep hanging in my house only because my family wants me to respectfully commemorate my aunt’s works.

Really, how would markets react to the US substituting “In a trillion dollar platinum coin (or two) we trust” for “In God we trust”?

When you have a painting hanging on the wall that the markets, for their own reasons, have decided is worth a lot, and based on that they lend you money, you do not even talk about hanging a new painting on your wall without running severe risks.