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UK ID CARD SCHEME LIKELY TO BE “DEBACLE”, SAYS JACK STRAW
UK home secretary David Blunkett’s on-off ID card scheme may now be off for the foreseeable future, following the leak of highly critical letters from foreign secretary Jack Straw and the Treasury over the weekend. Straw, Blunkett’s predecessor at the Home Office, warns of a “large-scale debacle”, while the Treasury letter argues that the £40 fee for Blunkett’s compulsory card would have to be categorised as a tax hike.
The leak, publicised in the Sunday Times, lines up two of the cabinet’s biggest heavyweights (and challengers for the succession to Blair) against the scheme, largely on grounds of cost and electoral expediency, which is the language the British government understands best. Straw, who jettisoned his own version of ID cards while Home Secretary, points out that the card would have to be free to asylum seekers, and points to electoral disaster ensuing from logistical and technical problems.
It has certainly occurred to The Register that the imposition of compulsory biometric registration would create a favorable climate for wide-scale revolt; people will tend to evade because they cannot be bothered or because they actively do not want to be tagged, so a large lumpenrevolt would make it difficult to isolate and pick off smaller quantities of liberal refuseniks. Straw is no liberal himself, but can display a weasel-like cunning in some circumstances, and we think this is one of them.More on this story here.
My name is Tony Blair, and I am powerless over my desire to bring in a national identity card.
My name is Jack Straw, and you can’t be the one to bring in a national identity card. My seeing-eye dog guarantees that I am David Blunkett, and I am powerless over my desire to bring in a national identity card.
Will the real proponent of national ID cards please stand up?
If you have not been following the prospects for a British national ID card -- oh, yes, the gloves have come off and they have stopped bothering to disguise it as an “entitlement card” -- there has been what you could call a cabinet reshuffle. Blunkett’s always been for it and increasingly rabidly so. At this point, he is like an alcoholic clutching his last empty cologne bottle: he has gotta have it, even if it costs an insane amount, is hideously unpopular, and will be completely ineffective at stopping the fraud he says he wants it in place to prevent.More on this story here.
Report slams London Mayor’s car charge zone contract.
Capita, the contractor responsible for the congestion-charging system that has previously been categorised by Mayor Ken Livingstone as an outstanding success, has been fined £1 million by Transport for London for poor customer services. Mayor Ken has subsequently rowed back a little, describing Capita’s performance as “completely unacceptable”, but still faces a caning when the London Assembly’s Budget committee considers a report on TfL’s contract with Capita at its meeting this coming Thursday.More on this story here.
INTEL’S GROVE: US SOFTWARE, SERVICES FACE MELTDOWN
Intel co-founder Andy Grove warned that US software and services would go the same way of the US steel industry. “It would be a miracle if it didn’t happen in the software and services industry,” he said. Grove attributed the crisis to higher labor costs in the US, and the diminishing number of people with “advanced qualifications”. US steel manufacturers saw their share fall from 50% to 10%. He confessed to being a “skunk at the garden party” before his Washington DC audience.
His honesty is commendable, but Grove all but admitted that he was part of the problem. Intel’s CEO Craig Barrett said recently that 1,000 new jobs created by Intel since the crash were offshore, in India and China. Grove said CEOs faced a conflict between generating profits for shareholders and “doing the right thing for the country”. He advocated higher R&D funding at universities, better collaboration between companies and “raising the hurdle for intellectual property litigation”.More on this story here.
How the USA is losing the hi-tech war: Short term gain means long term no bottom line.
An article in EE Times, relates to a talk iSuppli’s Len Jelinek gave, saying that the Communist Party has taken over the semiconductor industry in a series of five year plans aimed squarely at knocking the US and other democracies off track. Jelinek previously had said that he just could not understand why US firms were blind to what was clearly a long term plan.
Most US investors and semiconductor firms are so blinded by the short term quarterly grind of results and the share price ups and downs, that their long term is far shorter than any five year plan. And so the kind souls in the PRC Politburo must just be laughing to themselves as they see everything inexorably turning their way, as the US and the Western World not only cede most of the technology to Asia, but assist it by outsourcing all the IP too. Maybe it is Asia’s turn again...More on this story here.
CFP: THE “LEVEL PLAYING FIELD” IS MISGUIDED AND NON-EXISTENT
The OECD’s attempt to undermine tax competition has not had much success, even though so-called tax havens have been threatened with financial protectionism if they do not join the OECD’s tax cartel. Many low-tax jurisdictions did make “commitments” to weaken their attractive tax and privacy laws -- but explicitly stated that those commitments were binding only if all OECD nations agreed to the same flawed rules (the famous “level playing field” requirement). This has created immense problems for the Paris-based bureaucracy since many OECD nations -- including the United States, the United Kingdom, Switzerland, and Luxembourg -- are tax havens [to non-residents]. This paper demonstrates that the level playing field does not exist -- especially since the European Union was forced to abandon its original Savings Tax Directive when most OECD tax havens refused to agree to share confidential information about nonresident investors with foreign tax authorities.
So-called tax havens now have to make a choice: They can acquiesce to the OECD, which means surrendering their fiscal sovereignty and condemning their own people to lower living standards and less opportunity. Or, they can take this opportunity to withdraw -- or at least suspend -- their commitment letters. This course of action is not only legally correct (the OECD, after all, failed to fulfill its obligations), but also morally sound. Tax competition is a liberalizing force in the world economy. Fiscal rivalry helps lower tax rates and helps reduce discriminatory taxes on income that is saved and invested. And since even OECD economists have widely written that lower tax rates and neutral treatment of capital are important contributors to economic growth, the time has come to seize the high ground.More on this story here.
OECD split threatens tax evasion plans.
The OECD initiative designed to combat tax evasion is nearing collapse, according to a report in the Financial Times last week. The business daily revealed that the Organization is split over provisions in the plan offering improved access to bank information, and over the definition of tax fraud.More on this story here.
MONEY FLOWING INTO EMERGING MARKETS
An ongoing global economic recovery and inflows of hot money from funds has made emerging markets -- especially those in Asia -- the most attractive asset class. This is the view of JPMorgan’s global head of emerging markets research, Joyce Chang, who also suggests it is the right time to buy into the emerging market growth. “Almost 50% of the emerging market index is investment grade,” New York-based Chang said, adding such a situation had not happened for a long time. Chang said she expected the market to expand 5 per cent this year, its best growth rate in the past four years.
Funds have been continuously pouring money into emerging markets and, according to JPMorgan’s estimates, about $2 billion was pumped into the market last quarter. David Fernandez, head of Asia Pacific Economics and Equity Strategy, said the research house was overweight oil exporters such as Russia, Mexico, Algeria, Colombia, Venezuela and Nigeria. In Asia, Malaysia was the top pick.More on this story here.
JERSEY VISIT TARGETS PERSIAN GULF LEGAL AND FINANCE PROFESSIONALS
A delegation of government officials and finance industry representatives from Jersey is touring the Gulf, hosting presentations and receptions in locations such as Abu Dhabi, Dubai, and Bahrain. The ten day tour, which began last Thursday, is intended to build on the success of a 2002 visit to the region.More on this story here.
UK REVENUE “HITMEN” TO TARGET BILLIONS HIDDEN IN OFFSHORE TAX HAVENS
The Inland Revenue has appointed 64 tax-inspecting “hitmen” as part of an offensive aimed at recovering billions of pounds of unpaid tax secreted in companies and trusts in offshore tax havens. Using a new computer database, the Offshore Arrangements Project has identified 30,000 UK companies whose offshore shareholders are to be the subject of investigation. In addition, the Revenue is targeting suspect property transactions and intends to use new disclosure rules to collect more information about property owners and trustees from the Stamp Taxes Office.
Reg Day, tax director of accounting firm KPMG said the crackdown on large-scale evasion in tax havens was a timely move. “The Revenue has been criticized for not hitting targets and they are trying to catch up. The Offshore Arrangements Project is a cluster bomb and it is being dropped now.”More on this story here and here.
SCOTTISH CLAMPDOWN ON TAX-HAVEN LANDOWNERS PROMISED
The Scottish Executive has promised to act against the ownership of large parts of Scotland by estates registered in offshore tax havens following the Sunday Herald’s revelations that large parts of the country are held by secret companies which help their owners avoid UK taxes. The revelation that more than a million acres of Scotland is owned by such companies, hiding the identity of their owners, has prompted ministers to look again at the rules on giving public funding to offshore companies.
The First Minister, Jack McConnell, has also promised to review land registration rules and move towards compulsory registration if a voluntary scheme does not persuade owners to declare full details.More on this story here.
TAX BREAKS FOR WEALTHY NEW ZEALAND IMMIGRANTS COMING, BUT NONE FOR NATIVE KIWIS
Foreigners and returning New Zealanders who have been away at least 10 years might get a “tax holiday” on their overseas income when they come here to work, Revenue Minister Michael Cullen signalled. The proposed tax holiday would generally benefit “only the wealthy”, accountant Brent Gilchrist said. Other accountants said the tax break could help bring in possibly 20 wealthy individuals a year, with overseas investments of NZ$50 million to $100 million each.
PricewaterhouseCoopers senior partner John Shewan said the proposal was “significant”. Tax had been a key problem for people who had lived overseas for a long time and foreigners who had not lived here before. “We have a number of examples of very wealthy people who get close to deciding to live in New Zealand -- but when we explain the tax system they say, ‘No thanks’,” Mr. Shewan said.
At a tax accountants conference, Dr. Cullen also appeared to reject proposals to lower the rate of tax on inward foreign direct investment, which accountants said was a “big disappointment”. Mr. Shewan said Dr. Cullen indicated there was no reason to lower the top personal tax rate of 39% or the top company rate of 33%, because the economy had performed well since the personal tax rate was lifted.More on this story here.
POLITICIANS WANT TO EMPOWER SWISS EXPATS
Parliamentarians are looking at ways to give Switzerland’s large expatriate population more political power, including the creation of a “virtual” canton. The move would bring Switzerland in line with some other European nations, which allow their expatriate communities to be represented in parliament.
In Switzerland, there is usually one parliamentary representative per 35,000 people in each canton. Currently only about 83,000 Swiss abroad are registered to vote, which would entitle them to two parliamentarians in the House of Representatives. But if all 600,000 expatriates voted, the community would be as large as canton Vaud, which has 17 parliamentarians.More on this story here.
FAR FEWER PEOPLE THAN EXPECTED HAVE APPLIED FOR FINNISH DUAL NATIONALITY
Last summer, parliament passed a dual nationality law which made it much easier to regain Finnish citizenship. It applies to former Finns who lost their Finnish citizenship when they took another nationality. Now, if they want a Finnish passport alongside their current nationality, all they need to do is notify the Finnish authorities. The authorities expected tens of thousands of former Finns to take advantage of this opportunity. So far, only around 900 have.
Expatriates blame the price. They have to pay €300 for a Finnish passport.More on this story here.
NEW GLAMOUR FOR GOLD
Gold, the ultimate old-economy asset, is close to its highest price since 1996 and is capturing broader interest than it has for most of the last 20 years. That leaves two major questions for people who are thinking of investing in gold: how to do it, and whether to do it at all after the recent run.
Many financial planners encourage owning gold even when they expect and hope that it will lose value. It is the just-in-case component of a portfolio: a hedge against war, inflation, deflation or some other social, political or economic upheaval. To them, the question is how much to own. With the price of oil rising, the Middle East in turmoil and other global trouble spots threatening to erupt, there is no dearth of prospective events to hedge against.
“It depends on the specific investor, what assets they own and their financial goals,” said Robert Cox, a commodity adviser at Citigroup Private Bank in New York. “What percentage of gold is appropriate is particular to an individual -- normally 2 percent to 3 percent of one’s assets -- but I believe some investors like to have more in a volatile economic environment. Certain people feel safer holding more physical assets.”
Fund managers who specialize in precious metals naturally advise holding gold and its close relatives in more wholesale quantities. Charles de Vaulx, a manager of several portfolios, including a gold fund, for First Eagle Funds in New York, says the firm’s mainstream funds typically have 5 to 7 percent of their assets in gold, or in mining shares or other proxies for gold. That would have amounted to dead money for most of the 1980’s and 90’s, when gold lost as much as 70% of its value. But Mr. de Vaulx, whose investment style is to buy out-of-favor assets, said, “When we see the way Alan Greenspan tries to keep the bubble going, and considering that stocks around the world are not that cheap, even after a three-year bear market, it’s a good, cautious policy on our part.”More on this story here.
RUSSIAN ASSETS NOW A FIT HOME FOR THE SAVINGS OF WIDOWS AND ORPHANS?
President Vladimir Putin hinted last week that Russia’s debt might soon be re-rated, after five years in the financial wilderness following the country’s default in 1998. Even so, investors were surprised when, on Wednesday October 8th, Moody’s raised Russia’s bond rating by two notches to investment grade. This is a vote of confidence in the country’s political stability and economic well-being, and means that many huge investment funds, which are limited by charter to putting their money only into investment-grade debt, are now free to invest there. It is just the latest sign of a growing enthusiasm for Russia, particularly among foreign investors. But is it premature? Moody’s main rivals, Standard & Poor’s and Fitch, certainly think so. They are expected to leave Russia’s raings unchanged until the presidential election next spring.
There has been an impressive run of good financial news from Russia since it hit rock-bottom in the late 1990s. After the sclerosis of the immediate post-Communist years, when the economy shrank year after year, national income has grown consistently since 1998, and growth is expected to be a sprightly 6% this year. Russia has benefited from the recent rise in commodity prices, particularly that of oil, from which it earns the bulk of its hard currency.
Of course, Russia is not just an economic story. Investors have also been heartened by the way that Mr. Putin has pursued a twin strategy of trying to make the country a safer place to invest through strengthening property rights, while seeking a closer friendship with the West, and particularly President George Bush. But there are many who question both whether this really is Mr Putin’s vision, and just how safe Russia is as an investment. Russia was hardly an ally of America’s in the war in Iraq, a country to which it has sold weapons in the past. Nor is Russia a beacon of democracy. And there are now fears over the independence of the judiciary.More on this story here.
FRESH ATTACK ON BRITISH GOVERNMENT OVER EXPAT PENSIONS
Within hours of being sworn in, new Australian minister for family and community affairs Senator Kay Patterson issued a statement condemning Britain for stubbornly ignoring the Australian government’s repeated requests for a policy change. “The British Government has refused to accept its responsibilities to the 226,000 UK pensioners living in Australia,” she complained. “This is not fair. It is unacceptable for Britain to expect the Australian taxpayer to pick up the bill.”
It currently costs Australia $A100 million a year to support expatriates who cannot survive on frozen UK pensions. Senator Patterson issued her statement as UK pensioner organizations around the world wait to hear if the House of Lords will consent to hear an appeal for pension parity by the South Africa-based expat Mrs Annette Carson. As a result of the present policy, Britons who retire to any of 48, mainly Commonwealth, countries have their pensions frozen at the UK rate in force at the date they emigrate (or the date they reach pensionable age after emigration). Yet Britons who retire to EU nations, the USA, Israel, Turkey and several other countries maintain parity with UK-based pensioners.More on this story here.
LEGISLATIVE BATTLE PREDICTED FOR PATRIOT II
Lawmakers in both parties are already pursuing restrictions on the Patriot Act. Several bills have passed the House and are being debated in the Senate. On the Senate side, Sens. Larry Craig, R-Idaho, Richard Durbin, D-Illinois, and Russell Feingold, D-Wisconsin, have co-sponsored legislation to increase the safeguards for the use of search warrants. The Bush administration has been pushing to expand DOJ authority, arguing that while the Patriot Act provides vital tools for terrorist interdiction, more powers are needed.
Bush is seeking three broad new powers in proposed legislation that critics have labeled Patriot II -- the ability of law enforcement to obtain administrative subpoenas without prior review by a grand jury; the ability to hold accused terrorists, like those charged with some drug crimes, without bail; and the power to make terrorist crimes that result in death eligible for the death penalty.
Already, lawmakers have given a chilly reception to draft legislation leaked by the Justice Department in February. Proponents say new rules in Patriot II, a term at which advocates of increased powers cringe, would not assault personal freedom and are already available to prosecutors in other criminal cases.More on this story here.
ACLU documents White House push to pass PATRIOT II piecemeal in Congress.
Following on the heels of new momentum on Capitol Hill to rollback parts of the controversial USA PATRIOT Act, the American Civil Liberties Union (ACLU) released a report detailing how the White House is trying to pass the PATRIOT Act’s unpopular sequel by pushing it through Congress piecemeal.
“The leaked draft of PATRIOT II proved so overwhelmingly unpopular on the Hill -- on both sides of the aisle -- that the Administration is trying to slip it through under the radar in drips and drabs,” said Timothy Edgar, an ACLU Legislative Counsel and author of the report. “Congress needs to keep an eagle eye out lest the Bush Administration seize further expanded and unnecessary powers without proper deliberation,” he added.
“Administrative subpoenas are just the tip of the iceberg,” Edgar said. “There is clearly an organized push in the White House to pass these types of measures that sap liberty and do little to increase safety.”More on this story here.
IT’S CANADIAN LAWYERS V. FEDS IN LAW AIMED AT MONEY LAUNDERING
Canadian lawyers say they applaud the intent of federal regulations that are designed to end the laundering of an estimated $17-billion a year in this country, but are fighting tooth and nail to prevent those same regulations from applying to them. At stake are two of the most basic principles of the Canadian justice system -- lawyer-client privilege and the independence of the bar, they say.
To date, their efforts have met with singular success. The Federation of Law Societies of Canada, which regulates the profession, backed by the Canadian Bar Association (CBA), which represents the interests of lawyers, has won seven successive court battles. The federal government has faced the legal equivalent of a no-hitter. Despite its string of losses, the federal Department of Finance is undeterred. While it has agreed to discuss the situation with the legal profession, lawyers are still firmly in its sights.More on this story here.
SNOOP SOFTWARE GAINS POWER AND RAISES PRIVACY CONCERNS
Rick Eaton is the founder of TrueActive, which makes a computer program that buyers can install on a target computer and monitor everything that the machine’s user does on the PC. Spying with software has been around for several years but Mr. Eaton decided that one new feature in his program crossed a line between monitoring and snooping. That feature is called “silent deploy”, which allows the buyer to place the program on someone else’s computer secretly via e-mail, without having physical access to the machine. To Mr. Eaton, that constituted an invitation to install unethical and even illegal wiretaps. He made the change, he said, “so we could live with ourselves.”
Such principles seem almost quaint in a market where the products seem to grow more powerful and intrusive all the time. Other makers of “snoopware” -- as opposed to the software known as “spyware” that many businesses use to monitor the activities of Web site visitors and to send them pop-up ads -- enthusiastically pitch their products’ ability to be installed remotely. They typically skirt the ethical and legal issues with fig-leaf disclaimers and check-off boxes where buyers promise not to violate the law.
Privacy experts are not buying such arguments. Marc Rotenberg, who heads the Electronic Privacy Information Center in Washington, contended that selling software that can tap people’s communications without their knowledge violated the Electronic Communications Privacy Act. “I don’t think there’s any question that they are violating the federal law,” he said. The disclaimers, he said, “fail the straight-face test.”
There are more than a dozen snooping programs on the market, and their makers say they are used legally by employers to monitor workers’ Internet use, by parents to follow their children’s online wanderings, and by husbands and wives to catch cheating mates. The programs include “key loggers” that capture keystrokes, and can record what is onscreen, even turn on a computer’s Webcam -- and get the information and images back via the Internet.
And so a new market has emerged: criminals are using such programs on public computer terminals at copy shops and libraries to harvest credit card numbers, computer passwords and personal financial information. A New York man, Juju Jiang, recently pleaded guilty to planting monitoring software on computers at branches of Kinko’s.More on this story here.
Brokerage teen hacker charged.
The Securities and Exchange Commission last week began civil and criminal proceedings against a teenager who allegedly broke into someone else’s brokerage account to dump his falling stock options. Van Dinh, 19, of Phoenixville, Pennsylvania, is accused of disguising a key logger program (called The Beast) as a new stock-charting tool, which he promoted in chatroom for investors. The program enabled him to monitor the computer activity of anyone who ran the malware. Using this trick, Dinh allegedly obtained the login and password of a TD Waterhouse broker and placed orders for 7,200 soon-to-be worthless Cisco stock option contracts.
According to the SEC’s civil complaint, Dinh avoided a potential $37,000 loss on the Cisco options using the ruse. The investor (whose home PC was compromised) contacted the authorities when he found his account had been cleaned out to pay for worthless stock options. Dinh, despite using a variety of tricks in an attempt to cover his tracks, was located within a few days.More on this story here.
COOK ISLANDS CLEAN-UP TO END TAX HAVEN STATUS
The chairman of the Cook Islands Financial Supervisory Commission, Trevor Clarke, said that new laws mean that by June 4 next year, operators of offshore companies, banks, insurance companies and trust accounts will have to make full disclosure. “Basically the procedures and principles that will apply in the Cooks are those that will apply anywhere else,” he said.
The Cook Islands is on FATF’s list of non-cooperative countries, along with, Egypt, Guatemala, Indonesia, Burma, Nauru, Nigeria, the Philippines and Ukraine. FATF says the Cooks government has had “no relevant information on approximately 1,200 international companies that it had registered” and said the offshore banks were “not required to identify customers or keep their records and were not effectively supervised”.
This may have political consequences in India where former Punjab chief minister Parkash Singh Badal is under investigation by the state’s Vigilance Bureau. Current Chief Minister Amarinder Singh says the Badal family had $660 million in disproportionate assets, much of it in land in India. Singh told a New Delhi magazine that the Badal family had laundered the money in the Cook Islands.
Although the media has expressed bemusement that a small Pacific nation of just 14,000 people could be at the center of a potential political scandal, the Cooks’ banking system has previously rattled governments in Australia, New Zealand, Japan and Hong Kong.More on this story here and here.
Asia Development Bank reviews growth forecast for Cook Islands.
Forecast economic growth figures for Cook Islands in 2004 have been reduced by the ADB. The bank estimates the growth rate will be 1.8%. Earlier this year it predicted an increase of 3.2% during 2004. It says the overall outlook for the Pacific region is one of modest growth.More on this story here.
AUSTRALIA WILL NOT STAND BACK AND WATCH ITS PACIFIC NEIGHBOURS DESCEND INTO INSTABILITY
Foreign Minister Alexander Downer, in describing Canberra’s new hands-on approach to regional stability, said the international community expected Australia to play a leading role in helping its neighbors. At the center of Australia’s aid program was governance in the region, with a strong focus on law and order and economic and financial management.
“Already some of the small island states are troubled by business scams, illegal exploitation of natural resources, gun running and the selling of passports and bank licences to dubious foreign interests,” Mr. Downer said. “This sort of corruption is often accompanied by a breakdown of law and order which further compounds the inability of Pacific countries to attract investment and generate growth. We have seen this kind of vicious circle in the Solomon Islands.”More on this story here.
FRENCH FOOTBALL WILL BE DISCUSSING “THE MONACO PROBLEM”
Monaco’s status as a tax haven has long been a bone of contention for many Ligue 1 clubs who claim it gives the principality’s club a huge commercial advantage over its rivals in a domestic league that has stringent financial standards. Now Frederic Thiriez, president of the LNP which runs the professional game in France, will convene a meeting of all interested parties -- although he has excluded any suggestion that Monaco could be expelled.More on this story here.
CHECHNYA MIGHT BECOME OFFSHORE CENTER (SERIOUSLY)
A small economic oasis might appear in the North Caucasus soon -- Chechnya, the Izvestia newspaper reports. An agreement on the division of powers between Moscow and Grozny is being developed now. Chechnya’s neighbors are not against allowing their territories to participate in the experiment. “I would do a lot to make Ingushetia an offshore center, again. Work in this direction is underway, but I doubt that the idea will be supported,” Ingush President Murat Zyazikov said.
Mr. Zyazikov confirmed that the pilot project to make Ingushetia a free economic zone failed. Instead of generating economic growth, tax and customs privileges were used by hundreds of Russian companies. Mr. Zyazikov warned Chechnya not to repeat this sad experience. In view of this, the term “offshore” is being carefully avoided during the preparation of the Russian-Chechen agreement, although what Chechnya seeks are tax and customs privileges and other favorable economic conditions typical of free economic zones, the newspaper notes.More on this story here.
COMING CURRENCY DEVALUATION?
Cliff Droke says it is coming
After repeated warnings from currency analysts and market advisors (including the author) that the U.S. currency system is on the verge of becoming a blocked, two-tier system we now have confirmation that the country is one step closer to realizing this. When fully implemented, the new U.S. dollar will mean a “banana republic” type currency and across-the-board devaluation.More on this story here.
Cliff Droke rebutted
The last time the government changed its currency’s look -- the significant change being Franklin and the presidents getting larger heads -- the government spent something like $35 million to let the public know the new bills were for real. When you enjoy the privilege of printing the world’s reserve currency, which is redeemable in nothing, it is very important that you keep the public informed as to the latest design on your bills!
Half of Droke’s article quotes Lawrence Patterson, who, according to Droke, “authored the 1994 monograph titled Currency Recall, which accurately forecast the new multicolored notes.” Droke failed to mention that the recall, which Patterson wrote about nearly ten years ago, has yet confirm his forecast.
If Americans are “stuck” with the new currency, then foreigners are stuck with using the old greenbacks. Interestingly, the old bills will no longer be printed, which means that the supply of greenbacks cannot grow around the world. The primary benefit of being able to print the world’s fiat reserve currency is that foreigners really are stuck with it. Is the US about to give up the lofty privilege of buying the world’s goods with cheaply printed paper? Not hardly.
Supposedly, Patterson sees the value of the new dollar being cut as much as 50%, when convertibility to the old greenbacks is suspended. While I agree that the dollar will probably suffer horribly over the next few years, the loss will more likely come from the Fed’s excessive printing and our fedgov’s reckless spending. Everyone holding dollars, Americans and foreigners, will share the loss.
This article is dangerous not only because it is inaccurate, but it scares the hell of most readers. When the last big changes in our paper money were made, the same apocalyptic warnings rapidly spread through the precious metals industry--and without the benefit of the Internet. But, we still have a “one-tier” money system, and it will remain that way for a long time. Our fedgov will do nothing deliberately to cause the world to lose faith in the dollar. You can count on it.
Finally, the really bad thing about Droke’s article is that telemarketers will use it to convince their victims to buy overpriced numismatics and collectibles. Telemarketers will use Droke’s article to burn more victims.Full rebuttal here. (Scroll down to “Commentary”. The commentary is dated October 10, 2003.)
It’s here! The New Color of Money. Safer. Smarter. More secure!
The New Color of Money Web site is your source for information about the U.S. government’s latest redesigns to (ed: Did they mean to say “designs on”?) your currency.Site here.
The Federal Reserve’s press release on the new currency.
OCTOBER 9: U.S. government officials introduced the newly redesigned $20 note into the community today at the L’Enfant Plaza Post Office in Washington, D.C., marking the first opportunity for the public to spend the new currency in the Washington area. James Brent, the chief of the office of currency production in the U.S. Treasury Department’s Bureau of Engraving and Printing, joined Michael Lambert, financial services manager of the Federal Reserve Board, to mark this historic milestone.Complete press release here.
RUSSIA TO PRICE OIL IN EUROS IN SNUB TO US
Russia is to start pricing its huge oil and gas exports in euros instead of dollars as part of a stragetic shift to forge closer ties with the European Union. The Russian central bank has been amassing euros since early 2002, increasing the euro share of its $65 billion foreign reserves from 10% to more than 25%, according to the finance ministry. The move has set off a chain reaction in the private sector, leading to a fourfold increase in euro deposits in Russian banks this year and sending Russian citizens scrambling to change their stashes of greenbacks into euro notes.
German officials said Chancellor Gerhard Schroder secured agreement for the change-over on oil pricing from Vladimir Putin, the prime minister, while on a trip to Russia this week. The two leaders have forged a close personal bond and are both keen to check American economic and diplomatic power.
A switch to euro invoicing would not affect the long-term price of oil but it could encourage Middle Eastern exporters to follow suit and have a powerful effect on market psychology at a time when the dollar is already under intense pressure. Russia boasts the world’s biggest natural gas reserves and is the number two oil exporter after Saudi Arabia. If the dollar were ever displaced by the euro, it would lose the enormous freedom it now enjoys in running macro-economic policy. Washington would also forfeit the privilege of exchanging dollar notes for imports, worth an estimated 0.5% of GDP.More on this story here.
CHINA’S RICH SHUN TYCOON LIST RESEARCHERS
A quarter of China’s 100 richest people come from Guangdong, but many are reluctant to be named because they see it as a “kiss of death”, researchers said. Euromoney, which releases its list of the mainland’s mega-rich on Friday, said only half of those on the list had co-operated with the magazine’s researchers.
The reason: they feared drawing attention to themselves and becoming targets of investigations, criminal plots or even murders, as had happened to some tycoons named over the past four years.More on this story here.
AUSTRALIA’S IMPROVED TAX NET IS READILY CATCHING TAX CHEATS
The latest report of the Cash Economy Task Force was recently released, with some good news for the Tax Office and bad news for tax cheats. Some people think that the introduction of the GST has led to an increase in tax evasion using the cash economy. The taskforce has instead found that the New Tax System is significantly reducing tax evasion.
The taskforce draws its members from a wide range of backgrounds including academics, small business owners, tax professionals, micro businesses, home-based businesses, senior Tax Office staff, and representatives from industries heavily involved in the cash economy such as retailing and building and construction.More on this story here.
REGULATOR: DELOITTE CONTRIBUTED TO THE WORST INSURANCE FAILURE IN U.S. HISTORY
The nation’s second-largest accounting firm, contributed to the worst insurance failure in U.S. history by not telling state regulators about its client’s poor financial condition, the Pennsylvania Insurance Department alleged in a court filing. Deloitte signed off on an audit in February 2000 that said Reliance Insurance Co. had enough cash reserves to stay in business, but less than a week later its accountants told an investment partnership that Reliance had a “seriously deficient” $350 million shortfall, according to the department’s filing in Commonwealth Court last month.More on this story here.
US AND EU MOVE CLOSER TO PACT ON AUDITING PROCEDURES
The US and the European Union are moving closer to a compromise over the impact of the far-reaching US Sarbanes-Oxley Act on European auditing procedures. However, progress may be much harder to achieve on other disputes over measures the EU regards as extra-territorial, but which the US argues are justified by its security needs in the post-September 11 world.
EU ministers and officials have protested that Sarbanes-Oxley has overstepped the bounds of US power by requiring European auditors to register with US authorities. The US counters that the need for auditor oversight was shown by the Enron scandal and that since it only concerns the auditors of companies listed in the US, it is not extra-territorial. The two sides have been moving closer recently, with EU single market commissioner Frits Bolkestein dropping the EU’s outright resistance to registration and US officials hinting that Washington need not be in sole charge of investigations into foreign auditors.
During his trip to Washington this week, Mr. Bolkestein will also see Tom Ridge, the US secretary for homeland security, about two more intractable EU-US disputes, over US demands for flight passenger information and the right to inspect containers as they leave European ports.More on this story here.
U.S. CONGRESS WEIGHS CORPORATE TAX BREAKS, INSTIGATES FEEDING FRENZY
Congressional tax writers are rushing to complete legislation that would offer tens of billions of dollars in new U.S. corporate tax breaks, many of them for overseas operations, setting off a lobbying battle between major domestic manufacturers and some of the largest multinational corporations in the world.
Driven by a December 31 deadline, lawmakers hope to end a long-standing U.S. export subsidy in time to avert a trade war with the European Union. But several are also seeking to use the repeal of the $5 billion-a-year subsidy as an opportunity to pass new corporate tax cuts worth much more. Most of those would be aimed at earnings from domestic manufacturing, but many new proposals would also shield billions of dollars in earnings from overseas operations. The deadline -- coupled with pent-up demand from businesses that felt slighted by the large tax cuts of 2001 and 2003, which were aimed mainly at individuals -- has sent corporate tax lobbyists into a frenzy.
The debate over how to balance the bill’s tax breaks between those for domestic and overseas sales has pitted companies including Boeing and Caterpillar against Coca-Cola and General Motors.More on this story here.
WHEN THE CREDIT CHECK IS ONLY THE START
In the old days, way back when faxing seemed innovative, selecting the right tenant for a vacant apartment usually required a building owner or manager to phone the previous landlord, talk with the applicant’s employer, scan letters of recommendation, closely study the standard credit report and, sometimes, simply sit across the table and look the prospect in the eye. These days, when far more than a would-be tenant’s creditworthiness and job history can immediately be scrutinized, that process seems somewhat archaic.
A handful of new national companies -- estimates range from a half dozen to two dozen -- are attempting to revolutionize tenant screening. Landlords who subscribe to these services can mouse-click into utility bill records, eviction proceedings, bankruptcy and tax lien files. They can check national criminal databases, sex offender lists, the Treasury Department’s Web site of suspected terrorists, drug traffickers and money launderers. They can even -- at least through one company -- examine previous landlords’ assessments of a tenant’s habits: noisy? destructive? litigious? drug using?
Privacy rights advocates are concerned. They worry about “mixed files”, instances where someone is denied a place to live because their name is similar to someone with a blemished record. They worry about identity theft, about who inputs the information and who has access to it. They worry about incomplete records from housing court, indicating that a case has been filed but not disclosing the outcome, or even that it was the tenant who sued the landlord -- where even if the tenant prevails in a suit that information becomes a part of the screening services and the tenant ends up blacklisted.More on this story here.
UK TO COLLABORATE WITH CANADA, AUSTRALIA, NEW ZEALAND IN CRACKDOWN ON NET SCAMS
In the past UK consumers have been suckered into such cons as Canadian lottery scams (in which people are told they have hit the jackpot but need to hand over taxes or a handling fee) and other e-mail approaches urging people to part with their money. Now the UK government is to share information over fraudsters with their counterparts in Canada, Australia and New Zealand.More on this story here.
SOFTWARE MONOCULTURE, OR MASS HYSTERIA?
From the attention the subject is attracting at the moment, one might assume that our so-called software “monoculture” is about to spawn a plague of biblical proportions, writes Stephen O’Grady of tech analyst firm RedMonk.
Gartner’s new study, discussed here, recommends that user organizations deliberately deploy other platforms in certain domains as a defense against viruses and vulnerabilities associated with Windows. The idea is that if an attack on Microsoft platforms succeeds, and “cascades” through the network, then some users running non-Windows systems will be insulated from the attack. The Gartner report follows hot on the heels of another publication containing very similar arguments.
What’s RedMonk’s take? We think arguments underpinning the monoculture narrative are somewhat under-baked, and rest on somewhat doughy foundations. However, the narrative engendering these arguments is extremely powerful, which makes life far harder for Microsoft.More on this story here.
GOVERNMENT SUBSIDIES UNDERMINE EU DREAM
One of the strongest arguments in favor of the formation of the European Union was that it would give European companies a competitive advantage long enjoyed by those based in the US. Unfortunately, as the EU prepares for further expansion, the ideal of a single market continues to be undermined by national self-interest. Subsides for groups such as Bull disadvantage companies that obey the normal rules.
The affection that the French government holds for hardware vendor Bull is exceptional and long-standing. The European Commission has recently announced plans to take the French government to court over a €450 million loan made to Bull. The European competition commission approved the loan last year provided it was paid back within a year. Although Bull has not released any figures since its 2002 results, the signs are that it does not have the resources to return the money.
If Europe is to retain its credibility as a free and open market, it needs to ensure that the anachronism of state subsidies to companies like Bull cease. Those assets worth saving are better taken over by companies who know how to run a business.More on this story here.
LATEST ISSUE OF ESCAPE FROM AMERICA MAGAZINE IS OUT
EscapeArtist.com has put the latest issue of their consistently informative and entertaining online publication up on their site. Articles from this issue include:
Earn Money Offshore With An Online Casino: In order to move overseas the major hurdle most of our readers face is finding a way to make money overseas. We have continually stressed offshore eCommerce, but as of yet we have not really supplied our readers with anything substantial that can be used as a form of eCommerce. Now, over the next six months we promise to supply our readers with a series of methods for earning an income offshore and online. An independent offshore income that can be used to live how you want and where you want. We begin this series with internet casinos; internet casinos are the most lucrative form of online eCommerce, and they are all hosted offshore.
Your Very Own Home, On Trial... Part 1: It is funny how everything around us shrinks in value -- cars, computers, and money -- but most people think their house only grows in value. The Nobel Laureate, Elias Canetti, once said that inflation shrinks a man psychologically as well as materially. He saw the seeds of fascism in inflation. Read this article to see if the value of your home will be maintained or will it too shrink in value.
What Became Of “The Missing Lessons Of U.S. History”?: If you are wondering about the state of the economy and want to know what the credit boom of the last few years has meant to the economy of the U.S., then this article can help answer some of your questions. The creation of credit is basically the same thing as the central bank printing money, and with credit expansion comes an explosion in the money supply and why has that not led to inflation?
What Is Behind All Those E-mails You Receive: Have you wondered where all those email scams come from, all those emails you see wanting money for Prince so and so? Most originate in Nigeria. RJ Foydt has traveled throughout Africa: he has been in Gabon, Sierra Leone, Nigeria, Liberia and a number of other countires, if you really want to know what a scam is, then check out this article.October 2003 issue table of contents here.
ONLINE GAMBLING FIRMS EXAMINE OPTIONS IN WAKE OF US CRACKDOWN
As legislation designed to prohibit the use of credit cards, checks, and electronic fund transfers for the purposes of online gambling comes closer to enactment in the United States, techno-savvy gamblers and companies providing online gambling from offshore locations are examining their options.
According to the Web Host Industry Review news service, despite the relentless legal crackdown: “Creative gamblers have already figured out a way to beat the legislative effort by turning to a third party means to transfer money to alternative banking accounts, known as e-commerce pocketbooks, from which winnings or losses can be posted.”More on this story here.
ACAMDEMIC FEARS PATRIOT ACT WILL HIT BARBADOS’S FOREIGN EXCHANGE EARNINGS
A political economist at the University of the West Indies has warned lawmakers in Barbados that they may well have to challenge certain aspects of the United States Patriot Act which could seriously affect the amount that Barbadians remit back to the island from abroad.
Research Fellow at the Sir Arthur Lewis Institute of Social and Economic Studies, Dr Don Marshall, says: “Whoever is in office in Barbados, when this act is brought into full effect, will have to challenge the excesses of the breaches of international law that it beckons.”More on this story here.
COMPLIANCE STANDARDS MUST BE MAINTAINED SAYS BAHAMIAN MINISTER
Addressing a conference of compliance officers last week, Bahamian Minister of State for Finance James Smith announced that it was crucial for jurisdictions in the region to maintain compliance with international standards whilst embracing reform in the financial sector, in order to ensure future prosperity.
“We can no longer rely on the tax policies of other countries, particularly the developed countries to provide the basis for our growth of the financial services industry,” Smith told the first Annual Caribbean Compliance Conference last Thursday. “We must reform, restructure and if necessary re-tool our financial services industry from within.”More on this story here.
GUERNSEY PUNCHING ABOVE ITS OWN WEIGHT
Being so close to Jersey and sharing much of its history and culture, Guernsey regularly invites comparison with its larger neighbor. From the international investor’s point of view Guernsey has much in common with Jersey, notably self government, a common law legal system and low taxation. But the two islands are certainly not identical.
“Small but smart”, “the number two which tries harder” and “similar but different” are among the catch phrases often used to describe Guernsey as a financial centre. John Bridle, head of Guernsey Finance, the body which promotes the island’s finance industry internationally, adds: “We are a center of excellence which punches above its own weight.”
The business mix Guernsey offers international investors provides the best example of where the islands differ. While Jersey’s main strengths are private banking, investment funds and trust business, Guernsey is strong in insurance, an area where Jersey is weak.More on this story here.
New taxes on the agenda in Guernsey.
Jersey’s States has already announced new taxes to fill the £100 million black hole it expects when the zero business tax is introduced in 2008. A sales tax of between 5 and 8% is likely in Jersey alongside a payroll tax of 1.5%, to be paid by employers and employees. The Advisory and Finance Committee has consistently ruled out VAT, but has admitted that a sales tax could be on the agenda.More on this story here.
UK “SNOOPERS CHARTER” CLAIMED TO BREAK EU LAW
The data retention regimes in operation or preparation in at least ten European states are unlawful, and breach the European Convention on Human Rights, according to a legal opinion released today. According to the opinion, comissioned by Privacy International from law firm Covington & Burling, the European Commission’s framework directive on the retention of communications data is in itself unlawful, which means that any state in the process of actually implementing it may have to think again.
In the UK, this could add another chapter to the tortuous, and so far unfortunate, history of the “snooper’s charter”, which is currently before Parliament as a series of Statutory Instruments. Although a little watered down from its previous version, this still requires widespread retention of data as regards web sites visited, email addresses, phone calls and mobile phone location data, and still gives numerous public authorities access to that data. According to the opinion, it is precisely this scattergun approach that breaches the Convention on Human Rights.More on this story here.
BOTSWANA TOPS AFRICA IN ANTI-CORRUPTION STAKES ONCE AGAIN
The Southern African state of Botswana has once again achieved an impressive score in Transparency International’s 2003 Corruption Perceptions Index reinforcing the country’s position as one of the most politically and economically stable nations on the continent of Africa. According to the index, which measures the perception that business people and academics have of the extent of corruption amongst a nation’s political establishments, Botswana was the only African country to attain a score above five in TI’s ranking system, which ranks countries on a scale of one to ten, with the latter representing the “cleanest” score.
Overall, Botswana was ranked 30th, above more developed countries such as Italy (35th), South Africa (48th), Greece (50th) and Brazil (54th).More on this story here.
COSTA RICA PULLS OUT OF “GROUP OF 20 PLUS” TRADE ALLIANCE
A new trade alliance set up to counter the world’s richer nations over issues such as farm subsidies has suffered a further setback as Costa Rica become the latest country to pull out of the so-called “Group of 20 plus”. According to reports, the government of the Central American jurisdiction came to the decision after reviewing its trade policies, and warned that more countries in the region may follow suit in the near future.More on this story here.
UK CHANCELLOR URGES EUROPE TO REJECT MOVES TOWARDS TAX HARMONIZATION
In an opinion piece in the Wall Street Journal on Thursday, UK Chancellor of the Exchequer Gordon Brown reiterated the British government’s hard line stance towards the EU Constitution and firmly rejected the argument for European Union tax harmonization. Writing ahead of a summit between European ministers this week where the new Constitution will be discussed, Brown urges Europe to “conclusively rule out tax harmonization, agree it is a barrier rather than spur to global competitiveness, and resolve that tax competition is the basis on which Europe can compete with the rest of the world as well as command popular support.”More on this story here.
GO-AHEAD FOR OECD PLAN TO CRACK DOWN ON TAX EVASION
An initiative by the leading industrial countries to crack down on tax evasion was pulled back from the brink of collapse last night after the plan was endorsed by many of the world’s offshore tax havens following a two-day meeting in Ottawa. The meeting, which brought together representatives from 20 members of the OECD and 20 offshore financial centers, overwhelmingly agreed to push ahead with the plan.
There had been fears that the tax havens would abandon the initiative after the OECD failed to overcome objections from within its own ranks to aspects of the plan, which calls for uniform standards on the exchange of bank information. Leading OECD members, including the US and UK, say improved access to bank information is crucial in the fight against money laundering and tax evasion. However, all but two of the offshore centers at the talks yesterday agreed to carry on working within the plan’s framework, despite the divisions within the OECD. Two Caribbean countries said they were “suspending their commitments” under the initiative.More on this story here.
ROYAL WRANGLE IN BOHEMIA STOPS EU JUGGERNAUT IN ITS TRACKS
The royal family of Liechtenstein brought the European Union’s machinery to a standstill last night in a dispute over the seizure of two castles by Czechoslovakia after the Second World War. Prince Hans-Adam II blocked the accession of 10 new, mostly ex-communist, countries to the European Economic Area, a free trade zone that includes Norway, Switzerland and Liechtenstein, as well as all EU members.
Liechtenstein, a tax haven of 34,000 people nestled between Switzerland and Austria, is holding most of Europe to ransom over unfinished business with the Czechs. It claims that the principality was unfairly lumped together with Nazi Germany under Prague’s post-war Benes Decrees and was illegally stripped of all properties in Czechoslovakia. The royal family, which still runs Liechtenstein, lost a large part of its estates as three million Germans were expelled or fled from Czechoslovakia after 1945. They included the picturesque castles of Feldsberg and Eisgrub in Bohemia. The properties are now worth an estimated £70 million.More on this story here.
UK REAL ESTATE AGENT HIGHLIGHTS TAX ADVANTAGES OF CYPRUS
The tax and cost of living advantages for expatriates living in Cyprus have been highlighted by leading UK international estate agency Parador Properties, which recently opened an office in the Gulf city of Dubai. “Cyprus has always been a popular destination with Gulf expatriates and has an ever increasing international appeal. Many people are now looking to purchase property for investment, for holiday homes or thinking further ahead, to retire there,” the Parador Properties General Manager-UAE commented. “Quite simply, your money goes further in Cyprus.”More on this story here.
NASSAU GUARDIAN: THE US NEEDS TO REDEFINE ITS POLICIES TOWARDS THE CARIBBEAN
President George W. Bush’s recent decision to handpick Caribbean leaders for a breakfast meeting in New York was a classic example of the callous disregard which the United States has for the Caribbean. Barbados, Trinidad and Tobago, Haiti, St. Vincent and Dominica were not invited, while Jamaica’s Prime Minister P.J. Patterson was asked to attend but declined the invitation, citing previously scheduled engagements. Patterson’s action has drawn highly commendable reaction among members of the Caribbean diaspora in New York and diplomats at the United Nations who objected strongly to the way the meeting was arranged.
President Bush’s latest action in relation to the Caribbean leaves a lingering suspicion that as far as the US is concerned might will still always be right and that America will use the system to achieve its own ends regardless of the results. President Bush’s selective decision is, in my view, a clear indication that the US is seeking to assert a new form of imperialism on the Caribbean. It also brings into sharp focus, perhaps now more than ever, that there is really no clearly defined US policy towards the Caribbean.
No country, no matter how powerful, has the right to impose its will upon others. Indeed, the US should be in the vanguard of vigorously promoting the principles of non-interference in the internal affairs of other states, respect for sovereignty, and the right to self-determination. Yet, America’s foreign policy, not only towards the Caribbean, seems to be predicated principally on the basis that “you are either for us or against us”.More on this story here.
MONEY LAUNDERING BUCK STOPS IN US
Since the incidents of September 11, 2001, the US has launched a special drive to ferret out the sources funding for terrorism. Yet, its actual policies work to the contrary. It is, in fact, the single most important money laundering destination in the world.
There are two important types of money laundering. One concerns money which derives from business internationally accepted as being criminal -- such as narcotics or terrorism. The other concerns funds from activities, such as tax evasion, recognised as criminal only in a particular country. Yet money concealed in the business of narcotics or terrorism is laundered in much the same way as illegal flight capital. In their movement and concealment, the funds of such international crime are generally indistinguishable from capital flight.
Since the business of private banks and tax havens is managing flight capital, it is simplest to conceal money from drugs and gun-running in the same places. So, to really curb any particular sort of money laundering, it is necessary to act against all of it. But the US maintains the contradictory policy of seeming to campaign against money laundering involved in international crime while encouraging the other. As the result of the close connection between these two businesses, America loses the power effectively to act against any corrupt or criminal business, including the proceeds of international crime.More on this story here.
SHINING A LIGHT ON THE “SECRET LAW” OF THE IRS
The most subversive minds in global taxation work out of a squat, austerely appointed office building in Arlington, Virginia. Their ranks include the sober-suited, the leather-clad, and the body-pierced. Their mission is to serve as the eyes and ears of tax lawyers everywhere, exposing to public view the “secret law” of the Internal Revenue Service. They are the men and women of Tax Analysts -- self-described “tax geeks” and self-appointed watchdogs over the IRS.
Over the past 30 years, Tax Analysts, a not-for-profit publisher of bulletins and journals, has forced or is challenging the IRS to own up to the following: 1) That the agency compiled a web of internal memorandums and nonpublic rulings that gave its officers an edge when auditing taxpayers, 2) That it is considering sharing taxpayer information with other agencies in an effort to combat terrorism and corporate malfeasance, and 3) That it should disclose details of a private agreement allowing the Rev. Pat Robertson’s Christian Broadcasting Network to retain its tax-exempt status, even after it helped finance Robertson’s 1988 presidential campaign.
In a city riven by partisan bickering, Tax Analysts’s publications are regarded by tax lawyers, regulators, and congressional staff as the epitome of hard-nosed impartiality. While trade publications often criticize government agencies, few are prepared to mount the kind of prolonged legal struggle Tax Analysts has waged to pry information from the IRS.More on this story here.
New I.R.S. chief plans to focus on enforcement, vs. “customer service”.
Those businesses and wealthy individuals who for years have gotten away with cheating on their taxes will no longer slip past the IRS, the new commissioner, Mark W. Everson, said in his first interview since taking office in May. “Clearly in an effort to do better on the customer service side we poached from law enforcement,” he said. “Now there needs to be a re-centering of the agency.”
As he spoke, IRS agents in Chicago were serving a summons on a major law firm, Sidley Austin Brown & Wood, for the names of its tax-shelter clients. The firm said it was cooperating with the IRS and hinted that it no longer recommended tax shelters, saying it would advise “our former clients” of the summons so they “will have the opportunity to seek relief from the court.”More on this story here.
THE SUPER-HEGEMON BLEEDS RED INK
A child born in America today is $124,000 in debt the moment he draws his first breath. The newborn’s inherited debt grows daily. Upon reaching working age, an enormous debt awaits. How does a newborn get into debt prior to having a mortgage, credit card and car payment? Easy. Government assigns each newborn child a share of its debt. $24,000 is the newborn’s share of the accumulated $7 trillion federal debt. $100,000 is the newborn’s share of unfunded Social Security, Medicare and veterans’ health care benefits.
Unlike you and me, government does not care how deeply it goes into debt, because it has the power to pass its debt on to taxpayers. The theoretical limit to government debt is reached when service on the debt requires such a large percentage of national income that the population cannot reproduce.
US Comptroller General David Walker would prefer for government to get its spending and its accounting under control and not test how close it can come to the theoretical limit. Last month Mr. Walker told the National Press Club that for the sixth consecutive year the General Accounting Office “was unable to express an opinion as to whether the US Government’s consolidated financial statements were fairly stated.”
The President of the US and the Director of the Office of Management and Budget would be in prison right now if government was subject to the same accounting rules and punishments as private business.More on this story here.
BELGIAN TAX AMNESTY PLANS REBUFFED
Plans formulated by the Belgian government to introduce a tax amnesty in order to encourage citizens to repatriate undeclared assets have met with a stumbling block. The country’s highest court, the Council of State, is said to have sided with allegations by Luxembourg banks that the clause stipulating repatriation of the assets in order to secure the benefits of the amnesty contravenes EU rules on the free movement of capital.More on this story here.
SENATORS JOIN FORCES TO ROLL BACK PARTS OF PATRIOT ACT
A bipartisan group of lawmakers and advocacy groups have formed a “Coalition of Conscience” to roll back sections of the Patriot Act. “This is an amazing coalition. Very seldom do these groups and these senators come together,” said Sen. Richard Durbin, Illinois Democrat. Sen. Larry Craig, Idaho Republican, and Mr. Durbin -- joined by representatives from the American Civil Liberties Union and American Conservative Union, among others -- introduced the Security and Freedom Ensured (SAFE) Act.
The bill would limit the use of “sneak and peek” search warrants, which allow searches without notifying the target, to situations where a life is at stake, evidence may be destroyed or there is a flight risk. Roving wiretaps, which allow surveillance of any phone a person is known to use, could only be employed when the suspect is present. Warrants for these wiretaps must also identify the target and location of the wiretap.
Mr. Craig said they could not document any abuses of the Patriot Act since it was first enacted two years ago. “This has nothing to do with the current administration; it’s about putting into effect the right law,” he said.More on this story here.
PATRIOT Act opponents draw Justice Department’s ire.
The spokesman for the U.S. Justice Department Wednesday criticized local government officials and activists across the nation who continue to do battle with the USA PATRIOT Act and urge local law enforcement agents not to assist in its enforcement. But the remarks by Justice Department spokesman Mark Corallo came just days before grassroots activists spanning conservative, liberal and libertarian ideologies were planning to converge on Washington, D.C., for a two-day conference aimed at getting more cities to enact ordinances opposing the USA PATRIOT Act.
According to participants, the conference, “Grassroots America Defends the Bill of Rights”, will attract a wide-ranging collection of non-centralized activist organizations from the American Civil Liberties Union to Americans for Tax Reform.More on this story here.
WILL THAT BE (MICRO)CHIPS WITH EVERYTHING?
A couple of months ago, I mentioned RFID chips, and their potential for becoming something of a nightmare for those wishing to preserve their privacy (see RFID: Receiving You Loud and Clear). The emerging World Police State seems to be jumping into this technology with both feet. The EU is proposing a satellite road tolling system using Galileo, the European Space Agency’s satellite-based global navigation system, comparable to the GPS and the GLONASS systems run from the United States. Galileo is set to be fully operational in 2008, although initial launches are scheduled to begin as soon as next year. The primary use of the EU’s £4 billion Galileo satellite will be to track trucks and cars and bill their owners for road usage.
The UK, according to a document released by its very own totalitarian government, expect to have personalized microchips on every vehicle by the year 2007, which is not all that far away. Those who like to believe that Mr. Blair’s Cool Britannia is not totalitarian should answer for themselves the questions posed on the UK Liberty website such as: Why do nearly 1000 different public authorities have the power to keep you under covert surveillance, without proper scrutiny? Why does the Government want to share more of your personal data between thousands of bureaucrats, without your knowledge or consent? Why should your local council be able to read your telephone or e-mail records? Why do we have more CCTV cameras than almost anyone in the world -- and yet no adequate law to regulate and make sure it is not misused?
Returning to the chip, each one would contain the registered owners’ name and address, MOT (Ministry of Transport’s roadworthiness certificate) status, details of insurance, registration number, make of vehicle and colour, tax status, and MUCH, MUCH, More!, as advertisers might phrase it. Roadside scanners would be used to monitor passing vehicles and enable the police to collect unprecedented amounts of information about everyone’s movements. This computer bank will be linked ultimately with the EU which has a plan to track all vehicles within the EU all the time.More on this story here.
US COMPANY TO GATHER IRISH DATA
LocatePlus is a business-to-business and business-to-government provider of public information. The company has over 12,000 clients, of whom over 3,000 are affiliated with the US government. The expansion will add information from nine jurisdictions including Belgium, the United Kingdom, the Republic of Ireland, France, Germany, Italy, Luxembourg, Norway and Spain. LocatePlus compiles information on people’s current and historical addresses, contact details and their significant property transactions.
“We have a relational database that can show you your whole life,” said Steven Silva, vice-president of business development at LocatePlus. “I can see where I’ve lived, who I’ve lived with, the property I’ve bought and the cars I’ve owned.”
The company’s clients include many leading government agencies, such as the FBI and the Drug Enforcement Administration (DEA). The company claims to have information on nearly 98 percent of the adult population of the US and to have data entries relating to approximately 205 million individuals in the United States in an XML data source.
Silva was quick to point out that LocatePlus was bound by the “appropriate use” clauses of both US and European data protection legislation. “Appropriate use” clauses require that information only be used for the purposes for which it was gathered.More on this story here.
AUSTRALIA TO PUSH FOR ASIA PACIFIC TERROR DATABASE
Australia will push Asia Pacific nations at a summit next week to look at linking their immigration databases to form an alert system to track anyone with suspected terror links travelling through the region. Australian and U.S. officials had started looking at a common database, while retaining control of their own systems, which could provide a template for the region, a government spokesman said.More on this story here.
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