How Much Does The UK Actually Send To The EU

Big kerfuffle this week over Conservative Party leadership contender Boris Johnson facing a court hearing over his claim, made during the EU Referendim campaign, that Britain sends £350million a week to Brussels. Originally the Rabid Remainers tried to claim somebody in the Leave campaign (they weren’t quite sure if it was Boris, Nigel Farahe, Jacob Rees – Mogg, Michael Gove or somebody else and didn’t really care,) had said all of the money would go to the NHS. Nobody had actually said it of course but such is the solipsism of the globalist camp that if they want something to be true, they can easily convince themseles it is true.

The claim is in fact true but misleading. If the amount paid into the EU budget is taken, then it is close to £350million a week. Our net contribution (i.e. after the amount paid by the EU to fund various EU supported projects means the net amount we contribute to the EU is somewhat less. However that £350million is not the full story:

from The Bruges Group

The true cost to Britain being a part of the European Union is close to £661 million per week since 2010, a number hidden from the British taxpayers due to an intricate payments system and largely ignored by the mainstream media.

Our estimated figure encompasses £80billion lost to the Treasury after the European Court of Justice forced tax rebates to multinationals.

A key area of controversy is on the rebate, an annual, purported “reduction” in United Kingdom’s contribution to the EU budget that’s equal to about 66% of the difference between what the UK contributes to the EU budget and its receipts from the EU.

Even after the rebate, in membership fees alone, Britain shelled out £70.6 billion since 2010.

Data derived from a briefing paper on “The UK’s contribution to the EU Budget” indicates Britain contributed between £8-10 billion per year. The same report acknowledged “the UK made the second largest net contribution to the EU budget in absolute terms, and the third largest net contribution per head of population” in 2015.

If the EU exceeds its budget, as it did in the fiscal year 2014-2015, UK is responsible for footing the difference. We did that year in the amount of £1.7 billion, as reported by the Daily Mail.

The EU demanded the amount after recalculating the income of member states dating back almost 20 years, penalizing the British economy that was found to be larger than previously determined. The article detailed Britain “paid the amount due” in full with two instalments not subject to rebates.

Parliament has no control over these payments since Britain is part of the EU and civil servants are legally obliged to pay these costs. Britain is increasingly relied upon as a financial support structure for Eurozone countries facing serious financial difficulty or at risk of defaulting on their debt

oblications.

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EU’s Top Eurofederalist admits EU wants an empire
The leader of the Alliance of Liberals and Democrats in Europe (ALDE)
told CNN that plans to reform the EU and devolve power from Brussels back to the nation-state proposed by the populist paries that have spring up in member states, and led by Matteo Salvin’s Lega (League) in Italy, Marine le Pen and her Rassemblement National in France and Hungary’s Victor Orban, leader of the Fidesz party would mean that the bloc “will die inside.”

Little Donny Tusk The Polish Has-Been Tells Britain How To Vote.


Donald Tusk, who is the President of the European Council and was the centre-right Europhile Prime Minister of Poland from 2007 to 2014 made the remarks in support of his former Deputy Prime Minister, Anglo-Pole Jan-Vincent Rostowski who is standing as a Change UK candidate in London for Thursday’s election.


bYellow Vest Violence Erupts Again, 23rd Straight week Of Protests

Clashes between Gilets Jaunes (Yellow Vest) protesters and French riot police on Sturday (20 April,)during the 23rd straight week of protests across France. Police arrested 137 protesters Euro News reports.

Brexit Is Now About More Than Leaving The EU

Until now we have not posted anything in the past few days on Brexit. Our position is well know to our readers, let’s face it, the saturation coverage left nothing new to be said. The whole thing is a craptangle, but it was obvious from when the Conservative Party engineered a situation in which Theresa May was left as the only candidate for the leadership that there could be no other outcome.

EU “Sounds Alarm” Over New US Sanctions On Russia; Germany Threatens Retaliation
Late on Friday (21/07/17), Congressional negotiators agreed to advance a cross – party bill that would punish Russia for its (alleged) interference in the 2016 election according to the Wall Street Journal. And while it seems improbable that President Trump would sign the bill if it reaches his desk, the loudest complaint about the bill to date has emerged not from the Oval Office, but from US allies in NATO and the European Union …

Nigel Farage Swipes Back At Irrational, Screeching, Crazy Clinton
US Democratic Party presidential candidate Hillary Clinton launched a hysterical, irrational attack, filled with half truths and blatant lies, against the most prominent figure in the campaign to get Britain out of the EU (Brexit), UK Independence Party leader Nigel Farage, during a speech at a rally today. Mrs Clinton, responding to Farage’s address to a large and enthusiastic audience at a Donald Trump rally, may have been rattled at the prospect of having such a hihly effective campaigner in the rival camp …

Rebellion Against EU Authoritarianism Escalates As 8th Member Nation Threatens Referendum
Brussels went too far, they crossed the line in moving from an economic union to a political pan – European political empire. In the end it was a race as to which member state would quit first, Britain, Natherlands, Denmark or Italy. In the event it is Britain.

Is Brexit A Harbinger Of Doom For The ‘Experts’
The Brexit vote, the decision by a democratic majority in Britain to leave the European Union has sent shockwaves around the world. Not only does the EU now face a tsunami of departures, the usurpation of democracy by ‘experts’ ( technocrats ) has been challenged and exposed as a sham.

BREXIT vs. GREXIT – The Truth About The European Union And How It Treats Members
Unless the testicularly deficient politicians stand up for their nations he only thing that will halt the European Union’s push beyond Europe’s geographical borders to incorporate Asian, middle eastern and north African nations is war. Power is addictive and the bean counters of Brussels have ambitions far beyond Europe.

The Hypocrisy and Snobbery Of The Remain Campaign And The Antidote

When I had to defriend a Facebook contact because she was arguing in favour of the EU, it was not simply because I support Brexit that I had become pissed of with her, it was the snobbish and condescending way she dismissed supporters of LEAVE and their case. People are entitled to their opinion on the European Union, but they should check the ‘facts’ they post in support of their arguments.

The Labour Case For Brexit by Kate Hoey M.P.
After my short intro is a savage indictment by Brexit supporting Labour MP Kate Hoey of the way the Labour Party has abandoned the working class and is now trying to betray the party’s proud heritage and its roots in the industrial areas by taking Britain into an undemocratic, corporate controlled, capitalist friendly, elite dominated globalist control freak project.

Dutch Referendum This Week Shows why We Should Leave The EU.
Few of you were aware probably that there is an EU referendum vote in The Netherlands this week. As usual with anything negative about the EU barely a word has been printed in the topic in mainstream media and the silence from our notionally unbiased national broadcaster The Bolshevik Broadcasting Corporation (BBC) has been deafening.

French, Belgians, Dutch, Italians Follow Britain in Euroskepticism
Europeans want us British to lead them out of Europe. Don’t be fooled by project fear, the European Union (aka the Euronazi Federal Superstate) is falling apart. There will not be chaos if we leave, there will be chaos if we stay.

Head Of European Institute: Brexit ‘Better’ For Everyone
Brexit would be the best result of Britain’s in / out referendum for both Britain and the EU i a Belgian professor who heads up the European Institute at the London School of Economics (LSE) has said.

Johnson’s article lines up his reasons why Britain must exit on June 23rd. It’s time to be brave
OK, I know a lot of you think Boris is most accurately described by a word many people find offensive, but he’s put together a very good argument here on why we must leave the EU. Published in part here under ‘fair use’ terms and conditions, in the public interest …

If The Banker’s Cartel And Silicon Valley Are Pushing Cashless Stores We Should Avoid Them

This story is part of CNET’s ongoing Follow the Money series, which looks at how digital cash is changing the way we save, shop and work.

When Philadelphia City Councilman Bill Greenlee heard that a coffee shop and a salad restaurant right near City Hall didn’t accept cash, he thought it sounded unfair.

“I can get my coffee and muffin, but the person behind me who has the monetary unit of the United States of America, that’s been accepted here in Philadelphia since Ben Franklin, can’t?” he said in an interview. “It just seemed wrong.”

So last October, Greenlee (who uses both card and cash) co-sponsored a bill requiring businesses to accept cash. In March, Mayor Jim Kenney signed it into law.

Cashless stores and events are just starting to crop up in the retail landscape with much hoopla — consider the splashy launches of Amazon Go stores —  but they’re already running into hurdles from legislators in cities and states around the country. These governments are concerned that what some see as technological innovation could actually widen societal gaps between those who have access to financial services and those who don’t.

This work could ensure we don’t end up with a future in which there are stores that lower-income people just can’t use. But this legislation may also prevent new cashless experiments from ever taking hold and help cash stay king for a long time.

 

Cash’s demise at the hands of cards, e-commerce and mobile payments has been heralded for decades as a faster and more secure way to pay for stuff. After all, you can’t lose a digital wallet the same way you can lose a real one. Yet cash is still the most frequently used form of payments (representing 30% of all transactions), particularly for smaller transactions (where it’s 55%), according to the Federal Reserve.

While you might opt to pay for a bottle of water with card instead of cash, there’s still a swath of the population that doesn’t have that choice. Roughly 8.4 million households in the US were considered “unbanked” in 2017, according to the FDIC. That means no one in those households had access to a checking or savings account.

Check out Boggart Blog and The Daily Stirrer’s omnibus page on the Cashless Society

Fascism Spreads From Tech Corporations To Finance Sector As Mastercard Blocks Conservative Clients

OK, it’s not happening here in Britain yet but bad ideas from the USA usually manage to leap across The Atlantic Ocean without difficiulty, and the really unpleasant ones make that crossing at supersonic speed. The latest crappy idea from the far right control freaks of the US Progressivw Liberal movement, and probably the crappiest yet to spring from that fountain of self – righteous idiocy is financial censorship of our activities by credit and debit card providers.

Blocking payments to individuals or groups by financial service firms because of their political views impedes freedom of speech in a free society, journalist Ben Swann has told RT, following reports that MasterCard is allegedly on course to censor the far-right by blocking payments from supporters.


Picture via Zero Hedge

The New York-based organisation is reported to be on the brink of being forced by pressure from far left extremists to create an internal “human rights committee” that would monitor payments to “white supremacist groups and anti-Islam activists.”

“The problem is that everyone has their own views and, in a free society, the idea of a free society is that you are free to have your belief systems, as long as you’re not harming anyone else physically,” Swann told RT America.

“But your belief system belongs to you and you have the right be wrong. White supremacists have the right to be wrong.”

MasterCard is not the only financial services provider considering the selective banning of individuals from their services and funds. Crowd funding webside Patreon and online payments handler PayPal have previously barred individuals considered to hold ‘extreme views’ from receiving payments via their platforms.

But unlike being excluded from online only platforms, being cut off from one of the leading global financial services corporations is likely have a much greater impact on the financial status of an individual or a group, especially after the US Securities and Exchange Commission reportedly blessed MasterCard’s undertaking.

By doing this, Swann believes the government granted “big corporations the ability to control what voices are heard.”

The issue with such an approach, the investigative journalist argues, would lead to a wider crackdown on financial payments to anyone who an authoritarian government would view as unfavorable.

“The fact that the SEC has given a green light to this essentially says the SEC supports the idea of censoring these groups in order to freeze out essentially anyone you don’t agree with,” the journalist said.

“It is a dystopian 1984 world view and yet we’re living through it right now,” the journalist observed.

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UK Taxman Ruthlessly Pursuing Its Contract Staff For Six-figure Sums In Unpaid Tax


Picture credit: hillkindy.com

Majesty’s Revenue & Customs (HMRC) is once again hounding its own employees for potential six-figure bills as part of a crackdown on tax avoidance schemes. Some years ago I was a victim of one of these crackdowns, as an Information Technology consultant I, along with thousands of others working as external consultants in both government and business were forced by the tax inspectors to operate as  limited liability companies.

The tax service had decided we were using th

e self employed status to avoid National Insurance Employers Contributions (a sanitized name for a British payroll tax,) as the self employed were not liable for this levy. By reinterpreting a law in such an extreme way it stretched words beyond any literal meaning, the taxman decided we should all set up limited companies, with ourselves as the only employee, thus making our employers, the quasi – companies, liable as our employers for the payroll tax.

Taxman thought he had won, but people who decide to employ themselves are bright, resourceful types and we soon learned the completely legal tax dodges used by the super rich, through their companies and trusts. We got ourselves accountants who advised on techniques like buybacks, directors loans etc. and we, in partnership with our incorporated dopplegangers, were soon all paying less tax than we had as self employed individuals.

Needless to say the taxman was furious. But we IT professionals, consultant engineers, designers, technicians and other contract workers in media, finance, healthcare and across the whole range of commercial activities were being advised and assisted by accountants. So the taxman hit on a new idea, he talked politicians into passing retrospective laws. Something you did legally in, say, 1995, could in 1998 be declared to have been a crime since 1993, thus in 1999 you could be prosecuted for it. And they call this liberal democracy.

All that was a long time ago. The techniques we used then have been blocked one way or another, and as a bonus for the taxman, Britain’s software industry died (well, relocated to cyberspace,) as a result.

The ruthless war on enterprise and talent continued. Electricians and plumbers were targeted by the taxman in a purge that cost us poor taxpayers £8million and in which the tax inspectors managed to recover £100,000 in unpaid taxes (yeah, economics is not one of these people’s strengths.)

Among the people in another purge  to fall foul of this new retrospective lawmaking were entertainers and sports stars. And like the professional consultants of my era, a few years earlier,  these people fell foul of the taxman for doing something that was perfectly legal at the time they did it.

Around 50,000 contractors are now being targeted by the tax office for using so-called disguised remuneration schemes, which involved receiving income in the form of tax-free loans from an offshore trust, throughout the Noughties and more recently.

The law was changed in 2016 and those who used the arrangements now face huge tax bills which, campaigners claim, will force some into bankruptcy or cause them to lose their homes.

It has now emerged that HMRC engaged contractors who were being paid in loans and is now pursuing them for the unpaid tax, the Sunday Telegraph revealed.

A panel of MPs  looking into complaints about HMRC’s persecution of certain groups has received evidence from multiple contractors once engaged by the taxman who say they used disguised remuneration arrangements and now face penalties.

Sir Ed Davey, a former Government minister, said: “This is astonishing considering HMRC’s ruthless and unreasonable pursuit of people in this situation, when they didn’t break the law and followed professional advice.

 

“What’s more, the evidence we’ve received also shows that these people declared all their arrangements in their annual tax return, so contrary to their claims not to know, HMRC were indeed aware contractors working for them were using these schemes.

One contractor, who worked for HMRC over two spells, anonymously told the panel that, based on the bills received by her peers, she expects she could be asked for almost £140,000. The 45-year-old, who lives in London, said: “It feels like the Government has gone to war against you. This is all about wearing people down and getting them to give up.”

Well yes, as I said earlier the government has been at war with enterprise, creativity and talent for a long time.

The schemes became popular in 1999 and were briefly sold by some of Britain’s leading accountancy firms.

In December, the House of Lords Economics Committee criticised HMRC’s approach to recouping the tax owed, describing it as “retrospective” and saying it was failing to distinguish between “contrived tax avoidance by sophisticated, high income individuals” and relatively low earners who made “naive decisions”.

A spokesman for the tax office said: “HMRC has never endorsed or participated in disguised remuneration tax avoidance schemes. It is possible for contractors to use disguised remuneration without the participation or knowledge of their engager.”

He added that all contractors found to have used a loan scheme would be treated the same. What a pity they do not feel able to deploy the same diligence in their dealings with companies like Amazon, Google, Facebook, Apple and Microsoft, all of which are handled with kid gloves in spite of blatantly operating tax scams to avoid paying tax on most or all of their corporate profits.

 
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Google is an enemy and must be broken up, or freedom dies.
The Daily Stirrer

 

Prominent Hedge Fund Manager Sees Dollar Losing Reserve Currency Status

While the liberal democracies, having allowed Cultural Marxists to infiltrate government at every level and implement socially and economically disruptive policies Ray Dalio, founder of Bridgewater, the world’s biggest Hedge Fund believes now is a good time to reflect on China’s progress towards its goal of replacing the USA as the world’s most powerful nation.

China’s growth as the size if its economy closes rapidly on that of the USA, speaks for itself, but Dalio adds:

“To have such rates of improvements in so many areas and for so many people has made it the greatest economic miracle ever.”

 

And from what Dalio has seen, he believes that the very impressive results that the Chinese leadership and the Chinese people produced came about primarily because of the powerful combination of a) China’s opening up and reforming following an extended period of isolation that led to a fast catching up (especially in the coastal regions of China) with the advanced developed world, and b) the power of the Chinese culture and it’s related ways of operating.

Crucially, Dalio points out that, if you haven’t spent time in China, you need to get any stereotypes you might have out of your mind because it’s not how it was. This is not your father’s communism. It is “socialism with Chinese characteristics” that has been significantly and very effectively reformed, which has made it much more vital, creative, and economically free.

Dalio’s ‘romantic’ view of a paternal China is definitely not the mainstream narrative:

“From my experiences and from what I am told by Chinese who should know, I believe Chinese leadership seeks to run the country the way they believe a good family should be run, from the top down, maintaining high standards of behavior, putting the collective interest ahead of any individual interest, with each member knowing their place and having filial respect for those in the hierarchy so the system works in an orderly way. One of China’s leaders who explained this concept to me told that the word “country” consists of two characters, state and family, which influences how they view their role in looking after their state/family.

One might say that the Chinese government is paternal. For example, it regulates what types of video games are watched by children and how many hours a day they play them. As a broad generalization, when the interest of the country (like the family) is at odds with the interest of the individual, the interest of the country (like the interest of the family) should be favored over the interest of the individual. Individuals are parts of a greater machine. As a result of this perspective, the system seeks to develop, promote and reward good character and good citizenship. For example it gives people a social credit score that rates the quality of their citizenship. And each person is expected to view themselves as parts of the greater whole.

This management from the top down includes visualizing what China 5, 10 and 20 years in the future should be like and then making and managing detailed multiyear plans to build out that vision, with the goal being to make China as great as it can be. China is run more like a giant company with many subsidiaries, some within the government’s direct control and some within its indirect control.

But, as the fund manager notes, while Chinese culture has been evolving, it has at its most fundamental level been operating in similar ways for many hundreds or even thousands of years and the results of operating that way are knowable in an approximate way.

I have recently been researching the rise and fall of reserve currencies, which led me to study the rises and declines of the world’s most powerful countries. That led my research team and me to put together the following indices of the relative powers of leading countries since 1500. These indices are a combination of six sub-indices that measure six different types of power:

1) innovation & competitiveness,

2) domestic output,

3) share of world trade,

4) financial-center size and power,

5) military strength, and

6) reserve-currency status.

…and they show when different countries reached their peaks relative to the rest of the world.”

And to support his position he has put together an impressive set of statistics showing how global and regional powers from Portugal in the west and China in the east, in the late medieval era, rose to economic dominance in the west, and how as Portugal declined to be replaced by Spain, then France, then The British Empire and finally the USA all rose to dominate while they had a stable culture and strong values, and all declined when political factors undermined that cultural stability and government started to medle in private affairs.

China on the other hand, dominated in the east from around 1200 to 1900 CE only being challenged by the British and the Japanese in India from the mid nineteenth century. China’s social system had stagnated through isolation, while Jaoan’s had been revitalised by contact forst with Portuguese and Dutch traders and then US government and business interests.

After the communists took over China’s still stagnant society the nation became even more isolated until the idealist Mao Tse Tung was replaced by equally totalitarian but more pragmatic leaders who opened up the country economically and allowed individualism and enterprise to flourish. The reformed communist party opened up the economy but maintained the cultural stability based on family, community and tradition.

And judging by Dalio’s take on American culture, it is clear where he thinks this is going…

“Most fundamentally, the US is a country in which individuals, individualism, and individual property rights are perceived to be of paramount importance it is directed from the bottom up (e.g., through “one man, one vote” democracies that empower people to choose their leaders), being revolutionary is considered a good thing, and conflict is valued more than harmony.

Rather than respecting top down control most American have a strong preference to keep government from interfering with their most individual choices. Character development is a personal or family issue, not a government issue (which leaves it largely neglected in areas with broken families, especially if they’re poor).

Rather than there being a long-term top down vision for the country and a plan to achieve that vision, in the capitalist and democratic system such directions are more bottom up determined based on commercial and popularity considerations.”

Thus Dalio comes to the conclusion that as the USA continues to fragment socially it’s economic decline will also continue, while the Chinese, bound by their strong and stable culture, will continue to forge ahead, with the inevitable result that the US$ will lose its reserve currency status, something which is already happening as we have reported HERE. Of course, the world’s largest hedge fund manager avoids directly slamming America’s ‘dream’ or supporting China’s central planners:

“I’m not saying which system is better. Each culture/system has its pros and cons that I’m not going to get into now.

I believe that the important thing to know are that while there will be trade wars and trade truces they aren’t the most important things. ”

So, in summary, “it’s not the economy, it’s the culture stupid!”

The Demise Of Dollar Hegemony: Russia Breaks Wall Streets’s Oil-Price Monopoly

Significant moves in the global chess game have just rendered the huffing and puffing of warmonger Obama meaningless and will break Wall Street’s monopoly in controlling oil markets. The move is part of Vladimir Putin’s long-term strategy of decoupling Russia’s economy and especially its very significant export of oil, from the US dollar, in effect …

Naked Bankers Go For Gold

… That gold sale in 2013 was a naked short. The seller had no gold to sell. COMEX reported having gold only equal to about half of the short sale in its vaults, and not all of that was available for delivery (quite a lot of it belonged to the german government) In effect the naked shorting of gold could only work because really the right hand was selling to the left hand.

The Demise Of Dollar Hegemony: Russia Breaks Wall Streets’s Oil-Price Monopoly
In a move that went almost completely unreported in mainstream media, Russia has recently opened a market for the trading of physical and ‘paper’ oil (futures) in Moscow in Roubles. This is the most blatant challenge yet to the domination of the US dollar in world trade.

China launches global yuan payment system
China’s Central Bank has started a global payment system which provides cross-border transactions in yuan. The China International Payment System (CIPS) intends to internationalize the yuan and challenge the US dollar’s dominance.

EU and US talk of war with Russia

The European People’s Party (EPP) is the largest political group in the European Parliament, and they are unerringly supportive of America’s efforts to start a war with Russia. “The time of talk and persuasion with Russia is over,” MEP and Vice-President of the EPP told a meeting on Tuesday, 21 April, “Now it’s time for a tough policy, and concentration on defence and security …”

This Is Why The US Just Lost Its Superpower Status According To Larry Summers

As more and more countries flock to join the Chinese led Asian Infrastructure Investment Bank after Britain, France Australia, India and other traditional US allies defied Washington to associate themselves with China’s initiative, conservative economic pundit Larry Summers once a contender for the chairmanship of the Federal Reserve delivered a sharp rebuke …

The True Debt Disaster America Faces – Only A Fraction Of Government Debt Is Known To The Public

Politicians and the media talk about the $17 trillion debt the US Government owes to creditors. They are lying, the $17 trillion is a fraction of what america owes. The real figure is $200 trillon. And Obama’s loonytoons economics are driving that up at an accelerating rate.

U.S. versus Russia War: Top Russian Politics Scolar Stephen Cohen Tells The Truth

We have been blogging for four years about the US drive for war, provocation of Russia in Syria, Iraq, Ukraine and elsewhere made it obvious. But I’m just a news junkie with a strong sense of curiosity and have wondered why the US seems set on this course. Good to see experts like Stephen Cohen, a prominent expert on, Russia are coming onside.

Does It matter If The Dollar Is Replaced?

“Without delving too deeply into Austrian economic and capital theory, just let me point out that money printing disrupts the structure of production by fraudulently changing the “price discovery process” of capitalism. Capital is allocated to projects that will never be profitably completed. Bubbles get created and collapse and businesses are suddenly damaged en mass, thus, destroying wealth. (Zero Hedge)”

What the BRICS plus Germany are really up to in the Currency Wars?

The move led by Russia and China to dump the Petrodollar has escalated into a currency war, not the kind of war we assciate Obama with but give him time. Some wars as in Ukraine, by proxy are not going so well. Others, like the one against Islamic State aka ISIS aka ISIL in the middle east are going worse. Disintegration of The American Economic Empire is manifesting itself in moves by wannabe global players towards creating a multipolar world …

 

Russia Just Sent out a Message NATO Should Better Listen To

The key paragraph from the latest official Russian naval doctrine is that Putin and his military advisers have sent a clear message that NATO encroachment is unacceptable. To be honest, there is nothing earth shattering in this, The Daily Stirrer and many other alternative media news and analysis sites have been warning for about two years that Obama’s foreign policy was making conflict inevitable.

De – dollarization Moves Ahead – Once Again We Told You So,

What Putin Wants

China Warns U.S. to Stop Its Ukrainian Proxy War Against Russia

The World Rejects USA Attempt To Manipulate Venezuela

India’s Ruling BJP Party Crushed In Regional Poll

Another Conspiracy Theory Becomes Fact: Oil Collapse Is All About Obama’s Proxy War With Russia.

G77 Nations vow to destroy petrodollar and America’s New World Order

American Dollar Dumped

Iran’s Oil and the US Dollar

As Brussels Moved A Million Migrants Into The EU,Google Europe Moved $23 Billion To Bermuda Tax Haven In 2017

 

'I am going to test your heart under stress. Listen to what I am shouting. BILLION DOLLAR CORPORATIONS LEGALLY AVOID INCOME TAX.'Image: http://www.cartoonstock.com/

While the virtue – signalling lefties and university brainwashed millennials are creaming themselves over the United Nations Pact On Migration, which they see as a big step towards a borderless world; while they chirrup in unison as usual missing the point of what a borderless world would mean. “Oh those lovely dark skinned people will come by the million to live among us and enrich our culture with their enlightened ways and cultural traditions,” they forget that those enlightened ways and traditions include throwing homosexuals off high buildings, stoning women and publicly beheading adulterers.

Whether they think that is a good or bad thing is a matter of opinion. However other implications of a borderless world are not, and our virtue – signalling compatriots might be horrified to learn what other freedoms of movement a borderless world might facilitate alongside unrestricted movement of people. News of Google’s latest and perfectly legal thanks to progress in globalisation, move to protect its obscene levels of profit from taxation in the European Union involve a financial device known as the Double Irish Dutch Sandwich (DDIS). Be careful not to confuse this with A Dutch Reverse Steamboat, which falls into a very different category of activities.

The DIDS accounting strategy involves using a Netherlands-based subsidiary to shift royalties paid in Europe – Google EU is headquartered in Dublin – to Google Ireland Holdings, the company’s Bermuda-based affiliate. According to a Google filing with the Dutch Chamber of Commerce, the search giant channelled 19.9 billion euros ($22.7 billion) through such a structure to its company in the Bermuda tax haven in 2017, around 4 billion euros ($4.5 billion) more than 2016, Reuters reported.

The arrangement, a variation on the dear old ‘Luxembourg Structure’ allowed Google to reduce its tax bill for operations within the EU to single-digit levels,  roughly one-quarter of the official rate for those tax jurisdictions.

But little can be done about it because, as Google likes to remind us, it is perfectly legal.

“We pay all of the taxes due and comply with the tax laws in every country we operate in around the world,” Google said in a statement.

“Google, like other multinational companies, pays the vast majority of its corporate income tax in its home country, and we have paid a global effective tax rate of 26% over the last 10 years.”‘

The DIDS strategy, which involves an employee of the Netherlands company who works in Dublin, sending invoices for ‘management services relating to royalties on patents,’ to an employee of each national operation in the EU (these employees also work in Dublin.) The national offices (which are pigeon holes in mail drop addresses, the accounts people who deal with the invoices actually work in – you guessed it, Dublin.) Then the accounts department of the Bermuda company, the staff of which all work in Dublin, send an invoice for something vague like ‘financial consultancy relating to royalties on patents’ to European headquarters (in Dublin you may remember,) where it is dealt with by someone who may have handled all the transactions in the chain without ever leaving Dublin. This  allows Google to avoid US income taxes and European withholding taxes. However, thanks to recent changes in Irish law (which followed pressure from the EU), the favorable treatment is slated to end in 2020. That will be a bit of a bugger because they’ll have to move back to Luxembourg. Or maybe not.

The goal of a budgetary proposal in Ireland’s 2015 budget was to shut down the use of so-called “Double Irish” and “Double Irish Dutch Sandwich” structures commonly used by U.S. multinationals, such as Google, Microsoft, and Facebook, among others, to significantly reduce their worldwide effective tax rate on royalties derived from the exploitation of intellectual property .

Because the Irish proposal only addresses revenue from royalties on patents, does it really put an end to the Double Irish structures (with or without the Dutch sandwich) or US corporations exploiting the favourable treatment Ireland offers to hide profits offshore? In a word, No. At least not if your accountants have more brain cells than tits or testicles as the case may be. The same benefits can be achieved by only slightly modifying the existing structures to avoid triggering the new proposed rules, For example by moving Google Europe Holdings (Ireland) Ltd. from Dublin to Google Europe Holdings (Malta) Ltd. whose offices are in …………… Dublin.

The Double Dutch structures are useful for a few reasons. Primarily, Ireland has a 12.5 percent corporate income tax rate for active “trading” income, is English speaking, and is highly educated. Also Ireland uses a management and control standard for determining residency, thus it is possible to protect income earned by the top-tier subsidiary from Irish taxation by placing management in another country (an Irish Non Resident company.)

Thanks to the box checking culture of the US public sector, profits can be entirely avoided by ensuring lower-tier subsidiaries to be disregarded for U.S. tax purposes, because all of the non-U.S. activities are considered to be conducted by a single entity. The only factor that has been altered by the Irish proposals is the residency clause. Under the proposals, moving management and control of an Irish company to a Caribbean nation with which Ireland does not have a tax harmonisation treaty covering corporate residency will no longer achieve the desired objective.  Under the treaty with Malta however, it is possible to form an INR, as under existing structures, with its management and control in Malta. Pursuant to the treaty between Malta and Ireland (which will not be overridden by the new proposal), the INR, though trading solely in Ireland, should be treated as a resident of Malta, and not Ireland (See Article 4(3) of the treaty). Malta does not impose any tax on royalties derived from patents or other intellectual properties.
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This blog and the other websites controlled by Greenteeth Digital Publishing have always warned against the tendency to be fooled by the hyperbole that is attached to concepts like Artifical Intelligence, Machine Learning and Algorithms.

“Algorithms will always make better decisions that humans because they are not hampered by emotions,” the people who long for they day when all humans will have processors implanted in our brains so our every action can be controlled by that bunch of fascist nerds who run Google. These people are not human enough to understand emotions are a vital part of decision making just as undefinable qualities humans possess are what propelled us to the top of the food chain.

One of the areas in which we are told machines have already surpassed humans is trading in the financial markets. Computer Algorithms can trade shared many times in a minute, which has been responsible for the crazy fluctuations we have seen over the past few years in stock markets. Computers, algorithms and mathematical models of various market sectors look at the numbers but do not see the bigger picture.

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“Buy Tesla, buy NIO, Buy Frarday Future the algorithms tell the automated trading systems seeing the likelyhood that these stocks will rocket in value. Go long on cobalt says the wise human trader, seeing after in depth research that sales of EVs in nations which have cut subsidies on green vehicles have collapsed, but calculation that despite technical and practical problems not being talked about (if you live in mountainous country, forget that Tesla, they’re rubbish at getting up hills,) EVs have a future as city cars and short range delivery vehicles. Cobalt is an essential component of lithium – ion battery packs, there are not enough cobalt reserves to make battery packs for a tenth of the number of vehicles now on the world’s roads and lithium is not exactly plentiful when we consider the amount needed to provide batteries for 1.4 billion vehicles (the estimated number on the road in 2017.

Logically, when news of a cut in subsidies, or the threat posed by China controlling 90% of the world’s cobalt reserves his the financial news feeds, algorithms will pick it up, stocks are going to crash in price, but demand for cobalt will still be there.

Rather belatedly (it’s algorithms spooked by the massive losses suffered in global markets towards the end of 2017 perhaps, )it seems the wall Street Journal has picked up on this flaw in algorithm driven trading.

Since about two years after the last great crash in 2008, markets rose in what appeared to be an irreversible trend, driven by  the $£€ trillions of Quantitative Easing cash central banks [umped into the major economies. Algorithms were programmed to ‘buy the dip’ while frontrunning (an illegal insider trading practice,)  every buy , virtually nobody – except for a few “fringe”, “fake news” blogs – complained about the threat posed by algo trading and thee accompanying deterioration in market stability.

Algorithm  – driven trading enables trades to be conducted so quickly it is almost impossible to police this practice. A few financial pundits and bloggers who tried to warn that the practice would artificially inflate share prices were dismissed as fake news merchants as the official line that the economies of the liberal democracies were first recovering strongly and then forging ahead as demonstrated by competely false measures like the Dow Jones Industrial Index and The Financial Times 100 share index.

In December 2018 it looks as if the financial centres are entering their first ‘bear’ market since the 2008 crash, which those with long memories will recall was brought about by banks’ and investment funds’ exposure to dodgy debt derivatives (toxic debt,) and now as then politicians, media and regulators launched witch hunts as they sought scapegoats (anyone but the guilty banks of course,) and tried to deflect blame from the real culprit, then the irresponsible risks taken by traders looking for quick profit, this time, in their quest to help commercial banks make risk free profits the central banks, supported by governments, have pushed the cause of “computerized trading.”

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An article on the front page of The Wall Street Journal, 26 December 2018, titled “Behind the Market Swoon: The Herdlike Behavior of Computerized Trading”, features contributions from a number of WSJ writers who collectively opine that “behind the broad, swift market slide of 2018 is an underlying new reality: Roughly 85% of all trading is on autopilot—controlled by machines, models, or passive investing formulas, creating an unprecedented trading herd that moves in unison and is blazingly fast.”

Absolutely true, furthermore a majority of the “autopilot” trading is also on the upside, that is on the assumption that a stock already trading at its highest valuation ever will go even higher. Strangely government finance chiefs, bankers and financial journalists did not see fit to mention this  for several years. Of course, to new media readers, the story is all too familiar: after all we bloggers and citizen journalists have covered all of this not just on occasions when markets dipped sharply lower, but more importantly in the times when on an almost daily basis they soared to new, ever crazier heights, making an eventual crash inevitable.

From the WSJ article:

Today, quantitative hedge funds, or those that rely on computer models rather than research and intuition, account for 28.7% of trading in the stock market, according to data from Tabb Group–a share that’s more than doubled since 2013. They now trade more than retail investors, and everyone else.

Add to that passive funds, index investors, high-frequency traders, market makers, and others who aren’t buying because they have a fundamental view of a company’s prospects, and you get to around 85% of trading volume, according to Marko Kolanovic of JP Morgan.

Deutsche Bank argues that momentum has emerged as the most important force in markets, something we have claimed for years:

However, one key reason why trading has become so complicated for most, and certainly the algos, is that there is currently virtually no momentum in the market – with the MTUM ETF which tracks momentum stocks having its worst month and quarter since its 2013 inception – results in making any attempt to piggyback on the market a money-losing trade.

Bad news for those whose savings or pension pots are invested in index tracking funds. But what does it mean in plain English. Let’s turn to that WSJ article again and some quotes from traders who after a week of crazy fluctuations are suddenly very concerned about maret conditions:

Boaz Weinstein, founder of credit hedge fund Saba Capital Management LP, said the market had been underpricing uncertainty. Now it’s taking into account political issues “at the same time as the Fed is hiking, the economy is slowing, and a lot of people are feeling like the best days for markets are over,” he said.

Mr. Weinstein says there are dangers building in the junk-bond market. One worry, he says, is that so many junk bonds—he estimated about 40%—are held by mutual funds or exchange-traded funds that allow their investors to sell any day they like, even though bonds inside the funds are hard to sell.

When enough investors want to cash out, such a fund has to start selling bonds. But without much liquidity, finding buyers could be hard.

A selloff could start simply, he said. “It has its own gravity.”

The punchline to all this is delivered by COOPERMAN [Sorry US reders, that joke will only be accessible to UK readers of a certain age 🙂 ] :

Electronic traders are wreaking havoc in the markets,” says Leon Cooperman, the billionaire stock picker who founded hedge fund Omega Advisors.

There is much more in the full WSJ article, which also addresses a collapse in market liquidity, the a knock on effect from equity markets to the credit market. If that happens, and it seems to be happening already, the stage it set for an almighty crash, but let’s face it, afall from around 26000 to 21600 between December 1 and close of business on December 24, followed by a 1100 point rally on 26 December is not sane trading, unless we accept that the behaviour of the electronic herd is “the new sanity.”

Pundits were not talking about algorithm driven, high frequency EFT trading “wreaking havoc in the markets” when the indexes were soaring ever higher. 2018 has been a terrible year for financial traders, the wild fluctuations have become more exaggerated than ever while public trust has fallen below decimal zero and is heading from absolute zero. This maybe explains why the WSJ article reports on the previously unmentioned aspect of what the force that propelled markets to such unrealistic heights. For around a  decade now High Frequency Trading by computer, algorithm driven decision making  and various other computer based trading technologies including the ridiculously misnamed Artificial Intelligence Systems that so many people not old enough to understand how computers actually work place such great faith in, have been overruling the professional traders most vital tool, gut instinct. Computers and their algorithms and Artificial Intelligence only do what their human programmers, who are rarely people who have ever been equity, currency or commodity traders, instruct them to. Thus they  simply accentuate momentum either up, or down by frontrunning the orders from investors

HFTs can only frontrun the flow of orders,to elaborate on the brief explanation in the opening paragraphs, looking at figures on financial news feeds only visible on the deep web it seems that after the massive sell off in December fund managers needed to tie up cash over the quarter end (I’m not going to go into why, I’m an IT systems person not a fund manager,) and placed orders for around $60 billon-worth of equities to bed-and-breakfast their cash for tax reasons. And the algorithms, having noted the sell off, followed their programmed instruction to “buy the dip” to the tune of that $60 billion.

In the process, instead of adding liquidity to the market, the HFTs sucked liquidity out of it. It’s good that mainstream media is finally reporting on the problem which will ultimately kick off the next big crash and possibly bring down the corporatist economy, i.e.  the takeover of the market by computerized trading.

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– a crash which, however, will only be made possible by the Fed blowing the biggest asset bubble in history to monstrous proportions, something which the WSJ article does at least acknowledge in its final paragraph:

“It’s not just about the equity market throwing a temper tantrum, it’s far deeper than that,” said David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto. “This is a much broader global liquidity story.”

Encouraged by signs of economic strengthening, the Fed has been gradually raising interest rates from rock-bottom levels and selling back the trillions of dollars in bonds it bought in the postcrisis years. The central bank says the roll-back of stimulus is smooth. Others aren’t so sure what comes next. There has never been such a huge stimulus, and one has never before been unraveled.

Some believe there’s a hidden risk in debt that consumers and companies took on when borrowing was inexpensive. The Fed’s campaigns were  “fundamentally designed to encourage corporate America to lever up, which makes them more vulnerable to rising borrowing costs,” said Scott Minerd, chief investment officer at Guggenheim Partners. “The reversing of the process is actually more powerful,” he said.

Read the full WSJ article here.