Evil Tax Haven to be Punished

There are now signs that further euro area bailouts – or rather a specific one – could be shipwrecked in Germany's parliament. The bailout of Cyprus allegedly has a good chance of not getting the nod of Germany's parliamentarians – who have to give said nod, after the most recent ruling by the constitutional court in Karlsruhe on the limitations of the bailout policy.


“Optimism has been in no short supply in the euro zone in recent weeks. Before the new year, both European Commissioner Olli Rehn and notoriously circumspect German Finance Minister Wolfgang Schäuble said they believed that the worst of the euro crisis had passed. European Commission President Jose Manuel Barroso joined the chorus late last week.

But for crisis late-comer Cyprus, the worst is almost surely still to come. Even more concerning for the Mediterranean island nation, Germany's opposition Social Democrats (SPD) now say they are considering voting against a badly needed aid package for the country. And the Green Party is skeptical too. With Chancellor Angela Merkel no longer able to rely on her own parliamentary majority to push through euro-zone bailout packages, help for Cyprus may not be forthcoming.

 

(emphasis added)

So why is poor Cyprus going to be left out in the cold? After all, it is in trouble mainly because its banks had to eat two Greek defaults in a row. Wait for it…


“As things currently stand, I can't imagine German taxpayers bailing out Cypriot banks, whose business model depends on abetting tax fraud," SPD head Sigmar Gabriel told the Süddeutsche Zeitung in comments published Wednesday. "If Ms. Merkel wants SPD support for a Cyprus aid package, she will have to have excellent arguments. At the moment, however, I don't see what those might be."

The SPD is not alone in its concern over the planned aid package for Cyprus. Other euro-zone capitals and many in Brussels are likewise wary of propping up the banking industry there due to its having become a favorite destination for money from Russian oligarchs. The country is widely seen as a tax haven.”

 

(emphasis added)

Taxes in this Mediterranean backwater are simply too low! We can't have that! It's an evil tax haven! Besides, their banks accept deposits from – gasp! – Russian oligarchs! That's actually Western media-speak for 'rich people who hail from Russia'. As far as we're aware the original 'oligarchs' got the boot from none other than Vladimir Putin, who was at the time not exactly heaped with praise for doing that. Damned if you do, damned if you don't.

So in other words:  the eurocrats first pushed through the Greek PSI deal and the 'secondary haircut' (disguised as a harmless 'buyback') so that private sector investors in Greek bonds lost about 70% of their investment twice in a row. That inevitably ruined the Cypriot banks, which held quite a bit of Greek sovereign debt.  And now they want their pound of flesh from Cyprus before they agree to help. You can already guess what that is from the above: raise taxes! Will Ireland's 12.5% corporate tax be on the agenda next? The eurocrats are still fuming that Ireland didn't give in on that and the country isn't out of the woods yet – it too will reportedly require more help with its insolvent banks.

However, all of this might turn into a bit of a miscalculation if Cyprus becomes the next crisis trigger in the process – which it may or may not, given its small size. Who ends up paying for the resulting mess if that happens? Our guess would be every holder and user of the euro, as the ECB will then likely crank up the printing presses as promises alone will no longer work. Mind, we're not saying that anyone should be bailed out – we're merely pointing out the inescapable logical progression should a refusal to help Cyprus end up reigniting crisis conditions over a wider area, based on the 'the euro is irreversible' mantra.

Moreover, it appears now that the eurocratic centralizers and 'tax harmonizers' are trying to use the bailouts as a carrot and stick to force recalcitrant low tax jurisdictions into raising their taxes so as to snuff out tax competition. This will ultimately end with EU citizens everywhere paying the maximum amount of taxes imaginable. Hitherto tax competition provided a welcome check on the ambitions of politicians in the high tax countries. We're not surprised to see the socialist Sigmar 'light-bulb killer' Gabriel in the forefront of trying to bring an end to the relative freedom from onerous taxation enjoyed by the people of Cyprus.

 


 

cyprus-holiday-deals1

Sun,  sea, and low taxes…clearly they're having too much fun in Cyprus!

(Photo via content-mag.com)

 


 
 

Emigrate While You Can... Learn More

 
 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • India: Why its Attempt to Go Digital Will Fail
      India Reverts to its Irrational, Tribal Normal (Part XIII) Over the three years in which Narendra Modi has been in power, his support base has continued to increase. Indian institutions — including the courts and the media — now toe his line. The President, otherwise a ceremonial rubber-stamp post, but the last obstacle keeping Modi from implementing a police state, comes up for re-election by a vote of the legislative houses in July 2017.  No one should be surprised if a Hindu...
  • Moving Closer to the Precipice
      Money Supply and Credit Growth Continue to Falter The decline in the growth rate of the broad US money supply measure TMS-2 that started last November continues, but the momentum of the decline has slowed last month (TMS = “true money supply”).  The data were recently updated to the end of April, as of which the year-on-year growth rate of TMS-2 is clocking in at 6.05%, a slight decrease from the 6.12% growth rate recorded at the end of March. It remains the slowest y/y growth since...
  • How to Stick It to Your Banker, the Federal Reserve, and the Whole Doggone Fiat Money System
      Bernanke Redux Somehow, former Federal Reserve Chairman Ben Bernanke found time from his busy hedge fund advisory duties last week to tell his ex-employer how to do its job.  Namely, he recommended to his former cohorts at the Fed how much they should reduce the Fed’s balance sheet by.  In other words, he told them how to go about cleaning up his mess.   Praise the Lord! The Hero is back to tell us what to do! Why, oh why have you ever left, oh greatest central planner of all...
  • What is the Buffet Indicator Saying About Gold?
      Chugging along in Nosebleed Territory Last Friday, both the S&P 500 and the Nasdaq composite indexes closed at record highs in the US, with the Dow Jones Industrial Average only a whisker away from its peak set in March. What has often been called the “most hated bull market in history” thus far continues  to chug along in defiance of its detractors.   Can current stock market valuations tell us something about the future trend in gold prices? Yes, they actually...
  • The 21st Century Has Been a Big, Fat Flop
      Seeming Contradiction CACHI, ARGENTINA – Here at the Diary we have fun ridiculing the pretensions, absurdities, and hypocrisies of the ruling classes. But there is a serious side to it, too. Mockery makes us laugh. And laughing helps us wiggle free from the kudzu of fake news.   Is it real? Is it real? Is it real? Above you can see what the problem with reality is, or potentially is, in a 6-phase research undertaking that has landed its protagonist in a very disagreeable...
  • A Cloud Hangs Over the Oil Sector
      Endangered Recovery As we noted in a recent corporate debt update on occasion of the troubles Neiman-Marcus finds itself in (see “Cracks in Ponzi Finance Land”), problems are set to emerge among high-yield borrowers in the US retail sector this year. This happens just as similar problems among low-rated borrowers in the oil sector were mitigated by the rally in oil prices since early 2016. The recovery in the oil sector seems increasingly endangered though.   Too many oil...
  • Will Gold or Silver Pay the Higher Interest Rate?
      The Wrong Approach This question is no longer moot. As the world moves inexorably towards the use of metallic money, interest on gold and silver will return with it. This raises an important question. Which interest rate will be higher?   It’s instructive to explore a wrong, but popular, view. I call it the purchasing power paradigm. In this view, the value of money — its purchasing power —is 1/P (where P is the price level). Inflation is the rate of decline of...
  • Warnings from Mount Vesuvius
      When Mount Vesuvius Blew   “Injustice, swift, erect, and unconfin’d, Sweeps the wide earth, and tramples o’er mankind” – Homer, The Iliad   Everything was just the way it was supposed to be in Pompeii on August 24, 79 A.D.  The gods had bestowed wealth and abundance upon the inhabitants of this Roman trading town.  Things were near perfect.   Frescoes in the so-called “Villa of the Mysteries” in Pompeii, presumed to depict scenes from a...
  • Rising Oil Prices Don't Cause Inflation
      Correlation vs. Causation A very good visual correlation between the yearly percentage change in the consumer price index (CPI) and the yearly percentage change in the price of oil seems to provide support to the popular thinking that future changes in price inflation in the US are likely to be set by the yearly growth rate in the price of oil (see first chart below).   Gushing forth... a Union Oil Co. oil well sometime early in the 20th century   But is it valid to...
  • A Bumper Under that Silver Elevator – Precious Metals Supply and Demand
      The Problem with Mining If you can believe the screaming headline, one of the gurus behind one of the gold newsletters is going all-in to gold, buying a million dollars of mining shares. If (1) gold is set to explode to the upside, and (2) mining shares are geared to the gold price, then he stands to get seriously rich(er).   As this book attests to, some people have a very cynical view of mining...  We would say there is a time for everything. For instance, when gold went ...
  • Silver Elevator Keeps Going Down – Precious Metals Supply and Demand
      Frexit Threat Macronized The dollar moved strongly, and is now over 25mg gold and 1.9g silver. This was a holiday-shortened week, due to the Early May bank holiday in the UK. The lateral entrant wakes up, preparing to march on, avenge the disinherited and let loose with fresh rounds of heavy philosophizing... we can't wait! [PT]   The big news as we write this, Macron beat Le Pen in the French election. We suppose this means markets can continue to do what they wanted...
  • The Knives Come Out for Trump
      A Minor Derailment GUALFIN, ARGENTINA – Yesterday, stocks fell. And volatility shot up.   When too many people have too many knives out at once, accidental cubism may result   Reports Bloomberg:   The Dow Jones Industrial Average tumbled more than 370 points, Treasuries rallied the most since July and volatility spiked higher as the turmoil surrounding the Trump administration roiled financial markets around the globe. Major U.S. stock indexes...

Support Acting Man

Austrian Theory and Investment

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com