By Hermes Solomon
Marc Faber, the noted Swiss economist and investor, has voiced his concerns for the US economy, stating, “I think somewhere down the line we will have a massive wealth destruction. I would say that well-to-do people may lose up to 50 per cent of their total wealth.”
Faber believes that this bleak outlook stems directly from Federal Reserve Chairman, Ben Bernanke’s policy decisions of ‘quantitative easing’ – other economists calling it ‘a medicine which will become a poison’ or ‘money from heaven [which] will be the path to hell’.
Faber claims that if the Fed maintains its stimulus, standards of living will fall, and that social security and government pensions will not be paid in full, which is already the case in Cyprus.
Equally critical of the US economy is real estate mogul and entrepreneur Donald Trump, who is warning that the United States could soon become a large-scale Spain or Greece, (he’s never heard of Cyprus) teetering on the edge of financial ruin.
He points out America’s unhealthy dependence on China. “When you’re not rich, you have to go out and borrow money.” It is this massive debt that worries him.
“We are going up to $16 trillion [in debt] very soon, and it’s going to be a lot higher than that before ‘he’ gets finished,” Trump says referring to President Barack Obama. “When you have [debt] in the $21-$22 trillion [range], you are talking about a [credit] downgrade no matter how you cut it.”
Peter Schiff, the CEO of Euro Pacific Capital remarks that “the stock market collapse we experienced in 2008 wasn’t the real crash. The real crash is coming.”
With the Fed feeding 80 billion dollars monthly into the US economy, thereby disingenuously reducing unemployment, boosting the housing market and maintaining growth, it doesn’t need a renowned pundit to predict an even worse repeat of 2008.
By printing money so that banks can interminably make loans to corporations, SME’s and individuals, world economies have been kept afloat, suffering temporary set-backs in 1981 to 1985, 1990 to 1997, 2000 until 2003, and the whopper of 2008, when the entire house of cards crumbled and most are still struggling to pick up the pieces.
This last recession did not seriously affect Cyprus until late 2010, but when the slide finally began, our economy crashed like no other.
When a boat develops a serious leak, crew and passengers usually bail-out, but our government and the troika chose to sink the boat.
This tiny tax haven serving several thousand corporations/investors, was of little consequence to the Fed, the troika, IMF and those major players like Singapore, Switzerland, the Cayman Islands, the island of Jersey, Gibraltar, etc. where funds to the tune of over 200 trillion are deposited in non-functioning registered offices; e.g. an eight roomed house in the Caymans with over 18,000 company registrations and not a single ‘brass nameplate’.
Colgate-Palmolive, with its factories in France, recently moved its ‘head office’ to Switzerland – a corporation that turns over 20 billion annually and now pays 6 per cent corporation tax instead of the 30 per cent it was paying in France.
Fyffes Bananas moved its head office to Jersey and pays virtually no tax at all to the government of Costa Rica, where the bananas are grown or in Europe, where the bananas are sold.
There are over 200,000 corporations/companies avoiding payment of taxes to countries in which they grow their profits – Starbucks and Google are two well known examples.
Tax avoidance counsellors like Ernst & Young, KPMG Ltd (six offices throughout Cyprus) Price Waterhouse and many others, devise intricate schemes/loopholes in tax avoidance to enrich the rich and further impoverish the poor.
If a government cannot collect taxes from devious corporations where else will it search if not knock at the doors of the ordinary citizen?
The wealth of the world is held in the hands of one tenth of one per cent of the world’s population, and most of it offshore! That gives us a total of seven million stinking rich.
The Swiss banker, UBS actually dispatches tax advisors throughout the world soliciting investors to bring their dosh to Switzerland, where the vaults are straining under the weight of overload.
Tax avoidance schemes worldwide are the cause of today’s impoverished treasuries.
Over this past 20 years the world’s wealth has more than quadrupled, and most of it sits unused in Swiss banks. Poverty could be eliminated in a stroke, disease annihilated, hunger abolished and wars ended if only wealth was distributed evenly and due taxes from multi-nationals rightfully paid.
Corporate altruism does not justify tax avoidance.
Money is now the master of the house. (Matthew 6:24)
Shareholders at the Bank of Cyprus were again robbed blind this week by a new board, the members of which probably hold tax haven accounts offshore.
Our minister of finance, Harris Georgiades only has to flap his ears with statements like, ‘I do not envisage any new taxes’ for us to know there will be, and that our standard of living is set to fall even further.
What he doesn’t say is that in ‘tax-haven’ Cyprus our bankrupt property developers/banks will be protected at the cost of the ordinary tax payer – that our flag of convenience shipping will also enjoy similar protection as will MPs, their cars, perks, pensions and bodyguards.
Georgiades and his EU confrere ministers of finance will increase direct/indirect taxation and unemployment of the masses, slashing benefits and pensions, thus taking money out of the system and reducing the spending power of the ordinary man, while the real crooks (tax advisors and large multi-nationals/corporations) pile billions into one or other of the forty odd ‘paradis fiscaux’.
Once the greed-driven have acquired and protected, they begin to covet. They are not satisfied with all they have; their eye is on all that they don’t have. (Luke 12:15) This coveting begets more greed, the greed begets more selfishness, and the selfishness begets more coveting and so on towards madness.
Yes, it’s paradise at the moment for multi-nationals and hell for us! Governments must do more than simply pay lip service to shutting down tax havens. If they don’t then the ‘Walls of Jericho’ will come tumbling down and money become worthless!