Tuesday, July 10, 2012

573 World War I: Britain issues a debt-free currency - Bradbury Treasury Notes

World War I: Britain issues a debt-free currency - Bradbury Treasury Notes

(1) World War I: Britain issues a debt-free currency - Bradbury Treasury
Notes
(2) World War I: the British treasury (not the Bank of England!) issues
debt-free currency notes
(3) IMF working paper canvasses 100% Reserves, debt-free money
(4) Swiss bank to shut for US tax evasion
(5) Switzerland has six months to supply tax information - or be
blacklisted by EU
(6) World Radio Switzerland: Swiss given ultimatum: supply tax info, or
be blacklisted by EU
(7) Save the planet by taxing the $32 trillion hidden in offshore tax havens
(8) Exhaustive Study Finds Global Elite Hiding Up to $32 Trillion in
Offshore Accounts
(9) Abe government in Japan looking to end Central Bank independence
(10) The Trillion Dollar Coin: Joke or Game-Changer?

(1) World War I: Britain issues a debt-free currency - Bradbury Treasury
Notes


http://www.ukcolumn.org/article/bankers-bradburys-carnage-and-slaughter-western-front

Bankers, Bradburys, Carnage And Slaughter On The Western Front

A little known historical fact that will collapse even further the
reputation of the City of London.

ARTICLE | NOVEMBER 19, 2012 - 8:27AM | BY JUSTIN WALKER

[...] With the exception of a few thousand very powerful people, the
entire world’s population, all seven billion of us, are trapped ...
trapped into a criminal debt creating banking ‘system’ that has taken
hundreds of years to perfect and to come to fruition. This ‘system’
results in enslavement and servitude.

[...] Put very simply, the banking dynasties, such as the House of
Rothschild, control the political processes around the world to such an
extent that their network of private central banks have the right to
create money completely out of thin air and then charge interest on that
‘nothingness’. The polite term is ‘Fractional Reserve Lending’ but in
reality it is just simple fraud. The result is that the whole world is
currently drowning in a sea of fraudulent debt.

The USA now has a National Debt of over 16 trillion dollars, whilst the
UK owes its creditors over one trillion pounds. The planned contagion of
spiralling and unlawful debt is now sweeping over Europe with a renewed
vigour. Greece and Spain are being torn apart by appalling austerity
measures to the point that civil war or military intervention are now
being openly talked about on the streets. Italy is giving all the signs
that its economy is now entering into very stormy waters indeed.
Ireland, Portugal, France and Belgium are already in a mess and are
unlikely to see their debts become more manageable. Tens of millions of
people have experienced a major downturn in their quality of life, along
with their prospects for a more secure and better future, as unlawful
austerity measures brought in by corrupt politicians begin to bite. Even
the stronger economies of Germany, The Netherlands and Luxembourg have
now been downgraded by Moody’s, the Rothschild controlled credit rating
agency.

A Simple Solution To End This Madness – The Greenback:

What is happening to all of us is criminal. However, there is a very
simple solution that the banking dynasties do not want you to know about.

At the height of the American Civil War, the US Treasury warned
President Lincoln that further funding would be needed if the Federal
North was to have the resources needed to defeat the Confederate South.
The President initially went to the Rothschilds and the private banks
who wanted between 24 and 36 per cent interest. Lincoln knew that if he
agreed to take loans from the bankers that he would be putting his
country into a debt noose that would strangle the economic prosperity
out of his country and which would be almost impossible to pay off.

On the advice of a businessman with proven integrity, Colonel Dick
Taylor from Illinois, Abraham Lincoln made the decision to print
debt-free and interest-free paper money based on nothing more than the
honour of the American Government. Called ‘Greenbacks’ because they were
coloured green on one side only, the US Treasury issued 450 million
dollars worth of these notes and they were immediately accepted as legal
tender by a willing and grateful nation.

[...] And now we come to a very little known historical episode that I
alluded to at the beginning that takes this concept of the debt-free
‘Greenback’ from America to Britain ... and in so doing exposes the
truly appalling values that are prevalent even today within the City of
London.

The Great War And The Debt-free Bradbury Treasury Note:

Three weeks ago, as part of my ongoing research into the banking elite,
I came across a fascinating book entitled The Financiers and the Nation
by the Rt. Hon. Thomas Johnston, P.C., ex-Lord Privy Seal. It was
written in 1934 and republished in 1994 by Ossian Publishers Ltd.

The text of this quite remarkable and rare book is available here.

In Chapter 6, entitled ‘Usury on the Great War’, I’ve selected the
following paragraphs which I believe are both shocking and self-explanatory:

“ WHEN the whistle blew for the start of the Great War in August 1914
the Bank of England possessed only nine millions sterling of a gold
reserve, and, as the Bank of England was the Bankers' Bank, this sum
constituted the effective reserve of all the other Banking Institutions
in Great Britain.

The bank managers at the outbreak of War were seriously afraid that the
depositing public, in a panic, would demand the return of their money.
And, inasmuch as the deposits and savings left in the hands of the
bankers by the depositing public had very largely been sunk by the
bankers in enterprises which, at the best, could not repay the borrowed
capital quickly, and which in several and large-scale instances were
likely to be submerged altogether in the stress of war and in the
collapse of great areas of international trade, it followed that if
there were a widespread panicky run upon the banks, the banks would be
unable to pay and the whole credit system would collapse, to the ruin of
millions of people.

Private enterprise banking thus being on the verge of collapse, the
Government (Mr. Lloyd George at the time was Chancellor of the
Exchequer) hurriedly declared a moratorium, i.e. it authorized the banks
not to pay out (which in any event the banks could not do), and it
extended the August Bank Holiday for another three days. During these
three or four days when the banks and stock exchanges were closed, the
bankers held anxious negotiation with the Chancellor of the Exchequer.
And one of them has placed upon record the fact that 'he (Mr. George)
did everything that we asked him to do.' When the banks reopened, the
public discovered that, instead of getting their money back in gold,
they were paid in a new legal tender of Treasury notes (the £1 notes in
black and the 10s. notes in red colours). This new currency had been
issued by the State, was backed by the credit of the State, and was
issued to the banks to prevent the banks from utter collapse. The public
cheerfully accepted the new notes; and nobody talked about inflation.

To return, however, to the early war period, no sooner had Mr. Lloyd
George got the bankers out of their difficulties in the autumn of 1914
by the issue of the Treasury money, than they were round again at the
Treasury door explaining forcibly that the State must, upon no account,
issue any more money on this interest free basis; if the war was to be
run, it must be run with borrowed money, money upon which interest must
be paid, and they were the gentlemen who would see to the proper
financing of a good, juicy War Loan at 31/2 per cent, interest, and to
that last proposition the Treasury yielded. The War was not to be fought
with interest-free money, and/or/with conscription of wealth; though it
was to be fought with conscription of life. Many small businesses were
to be closed and their proprietors sent overseas as redundant, and
without any compensation for their losses, while Finance, as we shall
see, was to be heavily and progressively remunerated.

{photo}
Emergency Bradbury Treasury Notes (printed only on one side)
{end}

The real values of the private bankers and the City of London have been
exposed for all to see. Whilst hundreds of thousands of British soldiers
were dying on the killing fields of Flanders and elsewhere doing what
they saw as their patriotic duty, British bankers, safely out of danger
and not sharing the appalling conditions on the Western Front, were only
interested in one thing – how to make obscene profits from Britain’s
desperate efforts to win the war. To say that the private bankers and
the City of London have the morals of sewer rats is to be extremely
unkind to our little rodent friends. But this is the clincher. As a
direct result of the greed and treason of the British private bankers in
preventing the continuance of the Bradbury Treasury Notes, Britain’s
National Debt went up from £650 million in 1914 to a staggering £7,500
million in 1919.

And this is where it all gets particularly interesting. The following is
an extract from the official and current HM Treasury’s Debt Management
Office website ... and it appears to be completely at odds with the
account given by the Rt. Hon. Thomas Johnston.

“ The threat of World War One pushed British banks into crisis;
exacerbated further as half the world's trade was financed by British
banks and as a consequence international payments dried up. In response
to this crisis, John Maynard Keynes (the renowned economist), persuaded
the Chancellor Lloyd George to use the Bank of England's gold reserves
to support the banks, which ended the immediate crisis. Keynes stayed
with the Treasury until 1919. The war years of 1914-18 had seen an
increase in the National Debt from £650 million at the start of the war
to £7,500 million by 1919. This ensured that the Treasury developed new
expertise in foreign exchange, currency, credit and price control skills
and were put to use in the management of the post-war economy. The slump
of the 1930s necessitated the restructuring of the economy following
World War II (the national debt stood at £21 billion by its end) and the
emphasis was placed on economic planning and financial relations.

Why is there is no mention whatsoever of the £300 million of Bradbury
debt-free paper Treasury Notes issued in 1914? Instead, it says Lloyd
George, on the advice of John Maynard Keynes, used the Bank of England’s
gold reserves which, according to Johnston, only amounted to £9 million.
What is going on here? Who is telling the truth? Could it be that HM
Government, the puppets of the City of London, don’t want you to know
about the simple but effective concept of debt-free and interest-free
Treasury Notes?

What Do The System-serving Politicians And "Economists" Say About The
issuance Of Treasury Notes?

As soon as the concept of the debt-free and interest-free Greenback
Dollar (and now the Bradbury Pound) is raised in polite conversation
with either a politician or an economist, two immediate knee jerk verbal
reactions occur from these system-servers.

The first is to say that if a government suddenly starts printing its
own money through its treasury based on the credit and wealth of the
country, instead of going through its central bank, we would be heading
towards what happened in the Weimar Republic in Germany in the early
1920s where hyperinflation spiralled out of control and a loaf of bread
was bought with a barrow load of almost worthless paper money.

To this I just say look again at what actually happened in Germany at
that time. It was not the Weimar’s treasury but it was the privately
controlled central bank, the Reichsbank, who was printing the money,
coupled with the extreme actions of currency speculators and foreign
investors that caused all of the problems.

Hyperinflation could not happen as a result of the Bradbury Pound,
because the democratically elected government would actually ‘govern’
... now that is novel! Speculation would be prevented, and most
importantly, the newly created money would be spent on a productive
economy, rather than bankers bonuses.

The second reaction from system-servers is that the country is already
printing its own money – it is called Quantative Easing, that mysterious
cash injection into the economy which only seems to get as far as the
banks and not to where it is actually needed. Only trouble is, it is the
Bank of England doing the printing and not HM Treasury. Based around
government issued Bonds (promissory notes based on the wealth of the
nation), this complex process only increases the National Debt and it
certainly doesn’t solve anything.

The simple truth is that people who serve the system and who have been
‘educated’ by such organisations as the Fabian inspired London School of
Economics (LSE), are not suddenly going to bite the hand that gives them
a very good living. ...

(2) World War I: the British treasury (not the Bank of England!) issues
debt-free currency notes


http://homepage.ntlworld.com/trev.rh/Notes/treasury.htm

TREASURY NOTES

Up until the First World War, gold sovereigns and half sovereigns had
circulated as everyday currency for nearly a century. Following the 1833
Bank Charter Act, Bank of England notes were legal tender in England and
Wales only for amounts of £5 and above.

On 5th August 1914 (the day after war was declared), the Currency and
Bank Notes Act was passed which allowed the treasury (not the Bank of
England!) to issue currency notes of £1 and 10/-. these notes had full
legal tender status and were convertible for gold through the Bank of
England.

BRADBURY
The first notes were produced to a hurried design and, because of the
lack of availability of banknote paper, were printed on paper produced
for postage stamps. The £1 note was issued on Friday August 7th and the
10/- a week later. These are known as the first Bradbury issue after the
Permanent Secretary to the treasury, Sir John Bradbury. John Bradbury
was born in 1872 and entered the Civil Service in 1896, first in the
Colonial Office and then the treasury. After serving under Asquith and
then Lloyd George, Bradbury was appointed one of two permanent
secretaries to the treasury in 1913. Bradbury remained the governments
chief financial advisor during the war and left the treasury on 27
August 1919 to become principal British delegate to the Reparation
Commission.

Within days a new design was being worked on. The design was produced by
Mr. George Eve and the notes were printed on banknote paper. The notes
were issued on 23rd October (£1) and 21st January 1915 (10/-). These
notes are referred to as the second issue. Some of these second issue
notes were overprinted in Arabic, by the treasury, for use by British
forces in the Mediterranean.

A third design, featuring the King's head on the obverse (front) was
soon under way. These were the first national notes to be printed on
both sides. The £1 note had a picture of the Houses of Parliament on the
reverse whilst the 10/- note had a simple design featuring the
denomination within a fancy pattern. The notes were issued on 22nd
January 1917 (£1) and 22nd October 1918 (10/-). The first and second
issues ceased to be legal tender on 12th June 1920.

WARREN FISHER
Fenwick Warren Fisher was born in 1879 and entered the Civil Service in
1903. After spells with the Inland Revenue, an National Health Insurance
Commission he was appointed Deputy Chairman and then Chairman of the
Board. In 1919 he was knighted and as Sir Warren Fisher went as
Permanent Secretary to the treasury where he stayed until his retirement
in 1939. The first issue of notes under Sir Warren Fisher were identical
(other than his signature) to the third issue of Bradbury.

In 1923, a new watermark was introduced into the £1. Notes from this
time are referred to as the second issue.

In 1927, following the Royal and Parliamentary Titles Act, the heading
on the notes was changed to "UNITED KINGDOM OF GREAT BRITAIN AND
NORTHERN IRELAND". Notes from this time are referred to as the third issue.

In November 1928, the Bank of England took over the production of 10/-
and £1 notes, with the treasury notes from the third Bradbury issue
onwards remaining legal tender until the 31st July 1933.

(3) IMF working paper canvasses 100% Reserves, debt-free money

http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf

WP/12/202WP/12/202

The Chicago Plan Revisited

Jaromir Benes and Michael Kumhof

© 2012 International Monetary Fund
WP/12/202

IMF Working Paper

Research Department

The Chicago Plan Revisited

Prepared by Jaromir Benes and Michael Kumhof

Authorized for distribution by Douglas Laxton

August 2012

This Working Paper should not be reported as representing the views of
the IMF.

The views expressed in this Working Paper are those of the author(s) and
do not necessarily represent those of the IMF or IMF policy. Working
Papers describe research in progress by the author(s) and are published
to elicit comments and to further debate.

Abstract

At the height of the Great Depression a number of leading U.S.
economists advanced a proposal for monetary reform that became known as
the Chicago Plan. It envisaged the separation of the monetary and
credit functions of the banking system, by requiring 100% reserve
backing for deposits. Irving Fisher (1936) claimed the following
advantages for this plan: (1) Much better control of a major source of
business cycle fluctuations, sudden increases and contractions of bank
credit and of the supply of bank-created money.

(2) Complete elimination of bank runs. (3) Dramatic reduction of the
(net) public debt. (4) Dramatic reduction of private debt, as money
creation no longer requires simultaneous debt creation. We study these
claims by embedding a comprehensive and carefully calibrated model of
the banking system in a DSGE model of the U.S. economy. We find support
for all four of Fisher's claims. Furthermore, output gains approach 10
percent, and steady state inflation can drop to zero without posing
problems for the conduct of monetary policy. JEL Classification
Numbers:E44, E52, G21 .

[...] The first advantage of the Chicago Plan is that it permits much
better control of what Fisher and many of his contemporaries perceived
to be the major source of business cycle fluctuations, sudden increases
and contractions of bank credit that are not necessarily driven by the
fundamentals of the real economy, but that themselves change those
fundamentals. In a financial system with little or no reserve backing
for deposits, and with government-issued cash having a very small role
relative to bank deposits, the creation of a nation’s broad monetary
aggregates depends almost entirely on banks’ willingness to supply
deposits. Because additional bank deposits can only be created through
additional bank loans, sudden changes in the willingness of banks to
extend credit must therefore not only lead to credit booms or busts, but
also to an instant excess or shortage of money, and therefore of nominal
aggregate demand. By contrast, under the Chicago Plan the quantity of
money and the quantity of credit would become completely independent of
each other. This would enable policy to control these two aggregates
independently and therefore more effectively. Money growth could be
controlled directly via a money growth rule. The control of credit
growth would become much more straightforward because banks would no
longer be able, as they are today, to generate their own funding,
deposits, in the act of lending, an extraordinary privilege that is not
enjoyed by any other type of business. Rather, banks would become what
many erroneously believe them to be today, pure intermediaries that
depend on obtaining outside funding before being able to lend. Having to
obtain outside funding rather than being able to create it themselves
would much reduce the ability of banks to cause business cycles due to
potentially capricious changes in their attitude towards credit risk.

The second advantage of the Chicago Plan is that having fully
reserve-backed bank deposits would completely eliminate bank runs,
thereby increasing financial stability, and allowing banks to
concentrate on their core lending function without worrying about
instabilities originating on the liabilities side of their balance
sheet. The elimination of bank runs will be accomplished if two
conditions hold. First, the banking system’s monetary liabilities must
be fully backed by reserves of government-issued money, which is of
course true under the Chicago Plan. Second, the banking system’s credit
assets must be funded by non-monetary liabilities that are not subject
to runs. This means that policy needs to ensure that such liabilities
cannot become near-monies. The literature of the 1930s and 1940s
discussed three institutional arrangements under which this can be
accomplished. The easiest is to require that banks fund all of their
credit assets with a combination of equity and loans from the government
treasury, and completely without private debt instruments. This is the
core element of the version of the Chicago Plan considered in this
paper, because it has a number of advantages that go beyond decisively
preventing the emergence of near-monies. By itself this would mean that
there is no lending at all between private agents. However, this can be
insufficient when private agents exhibit highly heterogeneous initial
debt levels. In that case the treasury loans solution can be accompanied
by either one or both of the other two institutional arrangements. One
is debt-based investment trusts that are true intermediaries, in that
the trust can only lend government-issued money to net borrowers after
net savers have first deposited these funds in exchange for debt
instruments issued by the trust. But there is a risk that these debt
instruments could themselves become near-monies unless there are strict
and effective regulations. This risk would be eliminated under the
remaining alternative, investment trusts that are funded exclusively by
net savers’ equity investments, with the funds either lent to net
borrowers, or invested as equity if this is feasible (it may not be
feasible for household debtors). We will briefly return to the
investment trust alternatives below, but they are not part of our formal
analysis because our model does not feature heterogeneous debt levels
within the four main groups of bank borrowers. The third advantage of
the Chicago Plan is a dramatic reduction of (net) government debt. The
overall outstanding liabilities of today’s U.S. financial system,
including the shadow banking system, are far larger than currently
outstanding U.S. Treasury liabilities.

Because under the Chicago Plan banks have to borrow reserves from the
treasury to fully back these large liabilities, the government acquires
a very large asset vis-à-vis banks, and government debt net of this
asset becomes highly negative. Governments could leave the separate
gross positions outstanding, or they could buy back government bonds
from banks against the cancellation of treasury credit. Fisher had the
second option in mind, based on the situation of the 1930s, when banks
held the major portion of outstanding government debt. But today most
U.S. government debt is held outside U.S. banks, so that the first
option is the more relevant one. The effect on net debt is of course the
same, it drops dramatically.

In this context it is critical to realize that the stock of reserves, or
money, newly issued by the government is not a debt of the government.
The reason is that fiat money is not redeemable, in that holders of
money cannot claim repayment in something other than money.1 Money is
therefore properly treated as government equity rather than government
debt, which is exactly how treasury coin is currently treated under U.S.
accounting conventions (Federal Accounting Standards Advisory Board
(2012)). The fourth advantage of the Chicago Plan is the potential for a
dramatic reduction of private debts. As mentioned above, full reserve
backing by itself would generate a highly negative net government debt
position. Instead of leaving this in place and becoming a large net
lender to the private sector, the government has the option of spending
part of the windfall by buying back large amounts of private debt from
banks against the cancellation of treasury credit. Because this would
have the advantage of establishing low-debt sustainable balance sheets
in both the private sector and the government, it is plausible to assume
that a real-world implementation of the Chicago Plan would involve at
least some, and potentially a very large, buy-back of private debt. In
the simulation of the Chicago Plan presented in this paper we will
assume that the buy-back covers all private bank debt except loans that
finance investment in physical capital. We study Fisher’s four claims by
embedding a comprehensive and carefully calibrated model of the U.S.
financial system in a state-of-the-art monetary DSGE model of the U.S.
economy.2 We find strong support for all four of Fisher’s claims, with
the potential for much smoother business cycles, no possibility of bank
runs, a large reduction of debt levels across the economy, and a
replacement of that debt by debt-free government-issued money.

(4) Swiss bank to shut for US tax evasion

http://www.smh.com.au/world/swiss-bank-to-shut-for-us-tax-evasion-20130105-2ca0x.html

Date: January 06 2013

Rupert Neate

Switzerland's oldest bank is closing permanently after pleading guilty
to helping some of America's richest people evade paying taxes on at
least $US1.2 billion ($1.1 billion) hidden in secret foreign accounts.

Wegelin, which was founded in 1741, said it would ''cease to operate as
a bank'' after it admitted it had allowed 100 US taxpayers to hide their
money.

The bank agreed to pay $US57.8 million in fines and restitution to the
US authorities after admitting to conspiracy charges related to helping
US taxpayers living overseas evade payments to the Internal Revenue
Service for almost a decade.

Otto Bruderer, a managing partner of the bank, told a New York court:
''Wegelin was aware that this conduct was wrong … From about 2002
through to about 2010, Wegelin agreed with certain US taxpayers to evade
the US tax obligations of these US taxpayer clients, who filed false tax
returns with the IRS.''

The bank, which started business 35 years before the US declaration of
independence, released a statement confirming its closure on Thursday.

''Once the matter is finally concluded, Wegelin will cease to operate as
a bank,'' it said from its headquarters in the small town of St Gallen,
near the Swiss border with Austria and Liechtenstein.

It is the first foreign bank to close since the US authorities began a
crackdown on those helping Americans dodge taxes.

US authorities said Wegelin had wooed American clients fleeing
Switzerland's biggest bank, UBS, after it admitted in 2008 to helping
Americans evade tax, paid a $US780 million fine and handed over
information on more than 4450 accounts.

A US prosecutor, Preet Bharara, said Wegelin became a haven for US tax
evaders by hiding their money in secret offshore accounts.

Mr Bharara, who was described as the man ''busting Wall Street'' on the
cover of Time magazine, said Wegelin ''wilfully and aggressively jumped
in to fill the void that was left when other Swiss banks abandoned the
practice due to pressure from US law enforcement''.

He said Wegelin's closure and guilty plea was a watershed moment in US
efforts to crack down on individuals and banks ''engaging in unlawful
conduct that deprives the US treasury of billions of dollars of tax
revenue''.

''There is no excuse for wealthy Americans flouting their
responsibilities as citizens of this great country to pay their taxes,
and there is no excuse for foreign financial institutions helping them
to do so,'' he said.

It was alleged that Wegelin's scheme involved its bankers opening secret
accounts for US clients under code names and setting up sham entities to
avoid detection in various tax havens, including Panama and Liechtenstein.

It is not yet known if the bank will be forced to hand over the names of
US clients who held secret accounts. Until this week it had refused to
appear in court to answer the charges, leading US district judge Jed
Rakoff to declare it a fugitive from justice.

Guardian News & Media

(5) Switzerland has six months to supply tax information - or be
blacklisted by EU


http://www.taxresearch.org.uk/Blog/2013/01/18/the-swiss-put-on-notice-cooperate-or-else/

The Swiss put on notice: cooperate or else

Jan 182013

World Radio Switzerland has just reported:

Switzerland has six months to improve its tax practices or it will
be blacklisted by the European Commission.

That’s a warning given by a European Commissioner for Taxation and
Customs, Algirdas Semeta, to the print media in Switzerland.

He says if the EC’s expectations aren’t met some EU countries could
adopt “defensive measures.”

The Commission had wanted Switzerland to agree to an automatic
exchange of information, similar to the FATCA law it’s signed with the
United States. But Switzerland has so far been opposed to such an
agreement with the EC.

The friends of tax cheating in Switzerland have long taunted Semeta but
this time his threat is not hollow, and he can replicate it with Austria
and Luxembourg too. The fact is that all are signing agreem,ents for
automatic information exchange with the USA. And another fact is that
all EU states have ‘most favoured nation’ status with all three. So,
once they have given full automatic information exchange to the USA all
other EU countries have the right to dem,and it as well. It’s as simple
as that.

The days of full automatic information exchange, as demanded by the Tax
Justice Network for a decade, are on their way.

(6) World Radio Switzerland: Swiss given ultimatum: supply tax info, or
be blacklisted by EU

http://worldradio.ch/wrs/news/wrsnews/swiss-warned-on-tax-practices.shtml?34194

Friday, 18 January, 2013, 12:28

Swiss warned on tax practices

Switzerland has six months to improve its tax practices or it will be
blacklisted by the European Commission.

That’s a warning given by a European Commissioner for Taxation and
Customs, Algirdas Semeta, to the print media in Switzerland.

He says if the EC’s expectations aren’t met some EU countries could
adopt “defensive measures.”

The Commission had wanted Switzerland to agree to an automatic exchange
of information, similar to the FATCA law it’s signed with the United
States.

But Switzerland has so far been opposed to such an agreement with the EC.

(7) Save the planet by taxing the $32 trillion hidden in offshore tax havens

http://www.greenleft.org.au/node/53008

Solutions exist to avoid climate disaster

Green Left Weekly, Saturday, December 8, 2012

By Simon Butler

Several recent scientific reports on climate change have warned we are
headed for disaster, giving frightening evidence of just how bad things
could get. It’s just as frightening how little world governments intend
to do about it.

But it’s maddening to think how easy it would be to take serious action
on climate, and staggering to add up the benefits of doing so.

Take the example given by US ecologist Lester Brown in a speech in 2008.
He said burning coal makes up 40% of world carbon emissions from energy.
To replace that coal with wind power, Brown said we’d need to build
about 1.5 million wind turbines worldwide — and we should aim to do it
in 10 years.

That might seem like too huge a task: 1.5 million wind turbines would be
close to an 800% rise on today’s level.

But Brown pointed out that about 65 million cars had been made in the
past year. If just one industry can produce that many cars in a single
year, there is no question we could build 1.5 million wind turbines in
10 years, if society’s resources were mobilised to that end.

The car industry, such a big polluter, is still not building as many
cars as it wants to. In their 2012 book The Endless Crisis, US Marxists
John Bellamy Foster and Robert McChesney said the car industry, even
before the 2008 crash, “was faced with huge amounts of excess capacity —
equal to approximately one-third of its total capacity”.

They quoted a 2008 BusinessWeek article, which said: “Having indulged in
a global orgy of factory-building in recent years, the industry has the
capacity to make an astounding 94 million vehicles each year. That’s
about 34 million too many based on current sales.”

Business groups tell us that the profit motive and markets allocate
resources rationally and efficiently. But in practice, it’s so
irrational and inefficient that the idle manufacturing capacity in the
car industry alone could build Brown’s 1.5 million wind turbines.

It is not just with the car industry that the “efficient markets
hypothesis” falls flat. On an economy-wide scale, Foster and McChesney
present data showing idle manufacturing capacity across the US rose from
15% in 1970 to 22% in 2010. That’s an immense store of potential jobs
and climate solutions that is idle because its private owners haven’t
worked out a way to profit from using it.

In his book Plan B 4.0: Mobilising the Planet to Save Civilisation,
Brown came up with a “Plan B Budget”, which added up the costs of
restoring the Earth’s ecosystems. His budget included social goals, such
as universal education and health care, and natural restoration
projects, such as tree planting, soil renewal and water security.

Brown said this budget to “restore the Earth” required $187 billion a
year: equal to just one eighth of global military spending. It’s
questionable that Brown’s budget includes all the right goals or enough
goals. But even if he has underestimated the cost by 200%, the world’s
military budget could finance the job several times over.

Then consider the $32 trillion the Tax Justice Network estimates the
tax-dodging super-rich could have hidden in offshore tax havens. That’s
equal to almost half of global GDP. Imagine what could be achieved if
that ill-gotten wealth was not locked up by banks and other financial
parasites.

Last year, environmental consultants Ecofys released a report that said
the world could switch to 100% renewable energy in 40 years. It said the
task would cost about 3% of world GDP a year, with the money spent on
renewables, energy infrastructure and energy efficiency.

The report also said that this big upfront clean energy investment would
pay big social dividends, lowering energy costs by about $5.7 trillion a
year by 2050. Along with the climate benefits, spending big on a rollout
of renewable energy would save money that otherwise will go into the
hands of fossil fuel companies.

That is also why every oil, coal and gas company’s business plan is to
make sure that never happens.

It is sometimes said that the big corporate polluters and bankers are
guilty of ignoring the climate crisis. Some are, but the big money is
paying very close attention — looking for ways to profit from whatever
happens.

A much warmer world will bring more dangerous storms, droughts, floods
and bushfires — but it will also present new opportunities to profit
from the disasters. In her book The Shock Doctrine, Naomi Klein showed
how corporations and Western governments have become experts in taking
advantage of crisis and human misery.

She said this tendency has grown worse, with an “intensely violent brand
of disaster capitalism” — defined by the West’s invasions of Afghanistan
and Iraq — dominating “since September 11”.

Because fossil fuel use is so central to the capitalist economy, and
because the system must ceaselessly grow in wasteful ways or risk
collapse, “disaster capitalism” is the only capitalism we will ever get.

Humanity won’t be able to shape a new, sustainable relationship with
nature as long as mining CEOs, media barons and army generals still make
all the big decisions. The steps we need to take on climate change are
affordable and relatively straightforward, but we won’t get close to
dealing with climate change without fundamental social change as well.

The People’s Agreement adopted by the 2010 World People’s Conference on
Climate Change, held in Cochabamba, Bolivia, made the point this way:
“Humanity confronts a great dilemma: to continue on the path of
capitalism, depredation, and death, or to choose the path of harmony
with nature and respect for life.

“It is imperative that we forge a new system that restores harmony with
nature and among human beings. And for there to be balance with nature,
there must first be equity among human beings.”

(8) Exhaustive Study Finds Global Elite Hiding Up to $32 Trillion in
Offshore Accounts


http://www.democracynow.org/2012/7/31/exhaustive_study_finds_global_elite_hiding

TUESDAY, JULY 31, 2012 FULL SHOW

A new report reveals how wealthy individuals and their families have
between $21 and $32 trillion of hidden financial assets around the world
in what are known as offshore accounts or tax havens. The actual sums
could be higher because the study only deals with financial wealth
deposited in bank and investment accounts, and not other assets such as
property and yachts. The inquiry was commissioned by the Tax Justice
Network and is being touted as the most comprehensive report ever on the
"offshore economy." It also finds that private banks are deeply involved
in running offshore havens, with UBS, Credit Suisse and Goldman Sachs
handling the most assets. We’re joined by the report’s author, James
Henry, a lawyer and former chief economist at McKinsey & Company.
[includes rush transcript]

(9) Abe government in Japan looking to end Central Bank independence

http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore_Revisited_120722.pdf

BoJ - ending central bank independence

http://blogs.reuters.com/anatole-kaletsky/2012/12/19/is-japan-set-to-lead-after-20-years-of-torpor/

Is Japan set to lead after 20 years of torpor?

By Anatole Kaletsky DECEMBER 19, 2012

As 2012 draws to a conclusion, it’s likely that the fiscal cliff will be
averted, U.S. politics and monetary policy are irrevocably set, European
politics are suspended until September’s German election and the Chinese
leadership transition is over. In short, the political and monetary
uncertainties that have obsessed financial markets and paralyzed
business have all been dispelled. As a result, 2013 promises to be a
year for businesses and investors to focus again on economic
fundamentals and corporate performance instead of delaying decisions
while they waited with bated breath for the next euro summit, or
election, or meeting of the Federal Reserve and European Central Bank.
In one part of the world, however, events are moving the other way.

In Japan, economic and business conditions remain as dull as ever, but
politics and monetary policy are suddenly exciting. And while the world
has largely lost interest in Japan, the gestalt shift in the world’s
third-largest economy could have big implications for global business
and for the way voters think about governments and central banks.

Last weekend’s landslide election of Shinzo Abe, a potentially powerful
prime minister, was largely a result of his promise of a revolution in
monetary policy designed to jolt the Japanese economy out of its 20-year
stupor. If Abe delivers on his election rhetoric – still a big “if”,
especially in a country where power is wielded mainly by bureaucrats
rather than elected politicians – the global impact could be huge.

At a practical level, Abe has promised to force the Bank of Japan to
print money and weaken the yen until Japan’s inflation rate accelerates
to 2 percent and growth is restored. If he acts on this promise, the
effect will be to strengthen the dollar, not only against the yen but
also against the euro and other major currencies. If the yen weakens
substantially, high-end exporters in Germany and the rest of Europe will
stop gaining market share from Japanese rivals to offset their loss of
competitiveness in the U.S. market. The same will be true for Korean and
Chinese exporters, which have been crushing Japanese competitors hobbled
by the strong yen.

Less obvious, but even more important, could be Japan’s impact on the
global debate about macroeconomic management. The era when monetary
policy was simply about controlling inflation is over. The consensus on
macroeconomics created by the Reagan-Thatcher political revolution and
the near-simultaneous monetarist revolution in economic thinking has
broken down.

The singular focus on inflation made sense in the 1980s, when rapidly
rising prices were the biggest problem facing most economies.
Politicians, led by Ronald Reagan and Margaret Thatcher, realized that
the only sure way to stop inflation was to create previously unthinkable
levels of unemployment by relentlessly raising interest rates. Since
nobody wanted to take political responsibility for firing workers,
economists had strong incentives to come up with theories that proved
unemployment was natural and inevitable, that macroeconomic policy could
do nothing about it and that the sole effect of monetary policy was on
inflation. A natural and convenient corollary was to absolve governments
of responsibility for monetary management and shift this to politically
independent central banks.

Since economists understand incentives, it was not long before they
unanimously embraced the three key policy implications of the 1980s
monetarist revolution: acceptance of a “natural” rate of unemployment,
exclusive reliance on inflation targeting and political independence for
central banks.

Any economist or political analyst who suggested anything different –
for example, that politicians should coordinate monetary and fiscal
policy to manage unemployment, as well as inflation – was laughed out of
university economics departments, as well as finance ministries and
central banks. This purge is now over.

In the past few weeks, central bankers have broken the taboo against
acknowledging any responsibility for unemployment. Federal Reserve
Chairman Ben Bernanke has committed the Fed to a 6.5 percent
unemployment target and Mark Carney, the governor of the Bank of Canada
and soon of the Bank of England, has proposed targeting the growth of
gross domestic product. These were earth-shattering events for
economists who have spent the past 30 years training themselves and
their students to deny that monetary policy could have any lasting
effects on unemployment or economic growth.

But while a revolution is under way in the attitude to economic targets,
the new tools and instruments required to hit these targets have hardly
begun to be discussed. The unemployment and GDP targets suggested by
Bernanke and Carney are empty promises in the absence of policy tools
that could convincingly boost jobs and growth in the present
deflationary environment. Which is where Japan comes in.

No other economy has (yet) suffered anything like Japan’s 20 years of
economic stagnation. It would not be surprising, therefore, if truly
radical measures to deal with deflation were pioneered in Japan. Outside
Japan, no central banker or politician has yet gone beyond pumping money
into bond markets through quantitative easing. And nobody has suggested,
at least officially, that central banks should directly lend to
governments or finance one-off tax cuts.

These truly radical policies, which amount to handing out newly created
money to businesses and households, are sometimes described as
“helicopter money” or “quantitative easing for the people.”

Such policies would be certain to pull the world out of deflation, but
public discussion of such policies remains impossible in the U.S. and
Europe because they break the last remaining monetarist taboos: monetary
financing of government spending or tax cuts, and the political
independence of central banks. These two forbidden options – ending
central bank independence and then ordering the BoJ to print money for
infrastructure spending or tax cuts – have now taken center stage in Japan.

By breaking the taboos created by the monetarist revolution of the
1970s, Japan could accelerate and reinforce the revolution in economic
thinking that started in 2008. After 20 years of Japanese torpor, could
the world be transformed again by ideas “Made in Japan”?

(10) The Trillion Dollar Coin: Joke or Game-Changer?

Ellen Hodgson Brown <ellenhbrownjd@gmail.com> 20 January 2013 01:56

http://www.truthdig.com/report/item/the_trillion_dollar_coin_joke_or_game-changer_20130118/

Posted on Jan 18, 2013

By Ellen Brown, Web of Debt

This article first appeared at Web of Debt.

Last week on “The Daily Show,” Jon Stewart characterized the proposal
that the White House circumvent the debt ceiling by minting a trillion
dollar coin as an attempt to “just make shit up.”

Economist and NY Times columnist Paul Krugman responded with a critical
blog post accusing Stuart of a “lack of professionalism” for not taking
the trillion dollar coin seriously. However, Krugman himself had called
the idea “silly.” He thought it was just less silly — and less dangerous
— than playing with the debt ceiling, which was itself an
unconstitutional shackle on the Treasury’s ability to pay debts already
incurred by Congress.

Stewart responded on January 15 that he stood by his “ignorant
conclusion that a trillion dollar coin minted to allow the president to
circumvent the debt ceiling, however arbitrary that may be, is a stupid
f*cking idea.”

It’s all good fun – or is it? Most commentators have missed the real
significance of the trillion-dollar coin. It is not just about political
gamesmanship. For centuries, a secret battle has raged over who should
create the nation’s money supply – governments or banks. Today, all
that is left of the US Treasury’s money-creating power is the ability to
mint coins. If we the people want to reclaim that power so that we can
pay our obligations when due, the Treasury will need to mint more than
nickels and dimes. It will need to create some coins with very large
numbers on them.

To bail out the banks, the Federal Reserve, as head of the private
banking system, issued over $2 trillion as “quantitative easing,” simply
by creating the money on a computer screen. Congress, the White House,
and the Treasury all rolled over and acquiesced. When it was proposed
that the government bail itself out of its budget woes by minting a $1
trillion coin, the Federal Reserve said it would not accept the
Treasury’s legal tender. And the White House again acquiesced, evidently
embarrassed to have entertained this “ludicrous” alternative.

Somehow we have come to accept that it is less silly for the central
bank to create money out of thin air and lend it at near zero interest
to private commercial banks, to be re-lent to the public and the
government at market interest rates, than for the government to simply
create the money itself, debt- and interest-free.

The banks obviously have the upper hand in this game; and they’ve had it
for the last 2-1/2 centuries, making us forget that any other option
exists. We have forgotten our historical roots. The American colonists
did not think it was silly when they escaped a grinding debt to British
bankers and a chronically short money supply by printing their own paper
scrip, an innovative solution that allowed the colonies to thrive.

In fact, the trillion-dollar coin represents one of the most important
principles of popular prosperity ever conceived: national debt-free
money creation. Some of our greatest leaders, including Benjamin
Franklin, Thomas Jefferson, and Abraham Lincoln, promoted the essential
strategy behind it: that debt-free money offers a way to break the
shackles of debt and free the nation to realize its full potential.

We have lost not only the power to create our own money but the memory
that we once had that power. With the help of such campaigns as Occupy
Wall Street, Strike Debt, and the Free University, however, we are
starting to re-learn the great secret of money: that how it gets created
determines who has the power in society — we the people, or they the
bankers.

Australia's current account deficit widened to $14.9 billion in the
September quarter

http://news.smh.com.au/breaking-news-business/current-account-deficit-widens-to-149bn-20121204-2as7p.html?skin=text-only

Current account deficit widens to $14.9bn

Date: December 04 2012


Australia's current account deficit widened to $14.9 billion in the
September quarter, seasonally adjusted.

This followed an upwardly revised deficit of $12.369 billion in the June
quarter, the Australian Bureau of Statistics (ABS) said on Tuesday.

The median market forecast was for a deficit of $14.6 billion in the
September quarter.

The surplus on goods and services in chain volume terms (adjusted for
price changes) increased $490 million, which would add 0.1 percentage
points to growth in the September quarter measure of gross domestic
product (GDP), the ABS said.

No comments:

Post a Comment