Saturday, March 30, 2013

North Korea Lost It

North Korea keeps issuing threats against the US and they seem dead serious to try to prove that they are totally capable of attacking the US -or or allies- in an intelligent way.

The sad fact is that a losing war of aggression may be one of the few viable ways for North Korea to get out of the economic disaster they have gotten themselves into.

From many perspectives, North Korea is many decades behind the rest of its neighbors -and world- but the reality remains that they have a massive military force. Not necessarily effective, but massive. Anything massive attracts resources from other domains and North Korea has deliberately pursued a policy of 'military first'. So, almost everything not military related has been left without many resources.

Another -somehow less viable- way for North Korea to change its course is to completely alter the political discourse as well as its economic policies, but, after so many decades of indoctrination, its population would be left totally confused and disoriented.

North Korea is in a very hard situation and if we want to avoid an aggression war initiated by them we need to engage them in the same ways that we have started to engage China in the 1970s. However, for that to happen North Korea needs to take the first steps and show us that they want to follow into Chinese footsteps.

Based on what they are doing now, North Korea is doomed to remain one of the world's pariah for quite some time. I feel awful for its citizens though.

Thursday, March 28, 2013

Cyprus Should Exit the Euro Zone and 1 USD Should be Worth 2 Euros

What credibility do the Euro currency and the Euro zone have anymore?

Cyprus opened up its banks today and has enforced severe restrictions on cash withdrawals and transactions. As a matter of reality, and as it has been proven during the past several weeks, the citizens of Cyprus do not have total ownership of their own money held at banks.

Mind you that this is supposed to be the exact same currency as the one used in France and Germany.

We can clearly see that we are dealing with several flavors of Euros and some are seen as better than other. Currencies are fiat and Euro has very little fiat, that is for sure.

If you have Euro deposits at banks in -say- Germany you have a currency with more freedoms (withdrawal, use, leverage, etc.) than if you hold it in Cyprus, or even Spain (by association).

It is true that in Cyprus a total banking collapse has been averted but the price of this stabilization will linger in people's minds forever and this crisis has cracked open the door for the Euro to stop being a by-design multinational currency.

Euro is surely not sustainable under the current set up unless all vulnerable countries are expelled from its 'spell'. Currencies are not a magic tool to become wealthy and productive and the fact that a country gets to use the Euro does not mean anything more than a sanctification of a political will.

When the political tools fail to be backed up by economic performance the currency becomes an 'after thought' and an appendix. You can lose the currency in use and the country resets to a new orbit around the Euro. Why is exiting the Euro zone so difficult to accomplish?

Considering the challenges the Euro faces I think that the US dollar is totally undervalued.

1 USD should buy 2 Euros and I cannot understand how it is possible that today 1 Euro buys 1.28 USD. Can anybody explain this to me?

Tuesday, March 26, 2013

Intuit, the Maker of TurboTax, Hates Us

In case you have not read this story, Intuit is heavily lobbying the US federal and state governments to prevent them from allowing tax payers to get -at the end of the year- a pro-forma tax form auto filled with known-by-the-government tax information.

All for free (as it should be) and as it already is in other, with more accountable governments, countries.

Tax authorities at both federal and state levels already have direct and electronic access to the tax forms issued by our employers, banks, schools, brokers, mortgage companies, and so on. So why do we need to use products such as TurboTax? The simple answer is just so that Intuit can make billions of dollars a year, every year.

The idea of government issued tax forms is that, at the end of the tax year,  the federal and state governments would provide us with a link to our own personal tax forms filled with the financial information the government already knows and has access to. We would just edit some information -or just accept it as is- and then submit our returns for free, with no hassle and no payment to any third party processors (such as TurboTax or H&R Block).

Certainly Intuit would lose a chunk of change but we would gain the freedom of not having to worry about audits that much since we would use the governments' forms already pre-populated for us. In addition, this would be optional: we use it or not as a choice. And it would be a totally free choice, with no penalties.

How can we trust our government when companies such as Intuit sabotage the political process to appease their own, very private, benefits? Intuit is stealing money from us and there is nothing we can do about that, as the government is complacent to this type of 'transfer'. The government is supposed to serve us and not special interests.

In this case, the federal and state governments are actually a liability to all us when they yield to companies such as Intuit.

Whoever said that governments do not create jobs are total losers.

All TurboTax jobs were/are created by our own politicians. Our politicians misuse the government agencies they oversee to achieve personal gains (basically to help them win elections).

The current state is a win-win for the politicians and Intuit but we are all holding the bag to pay for it. Some think that this is an example of free enterprise. Free exactly for whom, I ask?

Monday, March 25, 2013

Cyprus: Casinos Steal Your Money Subtler Than the EU

Today I am reading that the Cyprus economic saga ended with an abomination of a compromise. I am left wondering what is going to happen next in Europe and I really worry that nothing good will come out of this widespread economic catastrophe.

After all, Ireland, Portugal, Spain, Italy, Greece, and Cyprus have had to each be bailed out during the past several years.

In Cyprus it was decided that all private bank account balances of more than E100,000 will be 'taxed' with a 'one time' 30% tax. 

Hocus pocus magicus! Close your eyes and watch this trick: You no longer have E100,000 in your savings account but only E70,000. Thanks for playing, suckers! Even casinos take your money more pleasantly than the government. To which I say: Fool me once shame on you, fool me twice shame on me.

It is not necessarily that large deposits will be taxed at an outrageous rate but that most bank deposits cannot be accessed -except for modicum amounts- at all during this round of political and financial negotiations. In other words, bank owners' deposits are literally being held hostage to political and economical processes they did not cause directly (or indirectly,  as a mater of fact).

How can this theft be justified and -let alone debated and considered- by law principles, constitutional practices, and economic theories? This is pure and unadulterated theft. Call it whatever you want but in my eyes this is highway robbery and no less than racketeering.

People have no legal recourse whatsoever and no way to challenge the legality of the Cyprus government action of holding bank deposits hostage while a law to tax them is being debated. It is like the movie 'Dead Man Walking'. This sort of government action cannot be called democracy. It is textbook communism.

The Cyprus government is saying: I take 30% of your money and then you are free to go. I already have your money and you can do nothing about that.

How can individuals defend against such irresponsible moves in the future? This action will freeze people's financial actions and they will do all they can to not hold money in places where governments can get to it.

If I were to have hacked all the bank accounts in Cyprus and simply stolen 30% of each bank deposit holding a balance of more than E100,000 I would be sought after by all police agencies on the planet. No questions, buts, and ifs about that.

When the government of Cyprus does it under the directions of international financial agencies they call it 'bailing out'. Really? Isn't this the core of the definition of asymmetric economic warfare?

Sunday, March 24, 2013

Our Tetra Malefic Leaders: Bush, Cheney, Rice, Rumsfeld

I was reading about a an Iraqi war veteran -Tomas Young- who -on his death bed- has sent a letter to George W Bush to ask him to apologize for engaging the US into the Iraqi war started in 2003.

I believe I cannot disagree with Tomas and I would like to see the tetra malefic group -Bush, Cheney, Rice, and Rumsfeld- deferred to the International Court of Justice to stand trial for crimes against humanity.

The war in Iraq initiated by the tetra malefic group was totally unjustified and unnecessary. Not only it has killed hundreds of thousands of innocent civilians but it has also made the US a much more disliked nation than before the war started.

The massive US internal budget deficits the war has partially caused have made the US a weaker nation, a nation that now has to set aside money to pay down the accumulated deficits (debt) and this will undermine for a very long time the well being of the weakest amongst all of us.

How can anybody justify the war in Iraq anymore?

Monday, March 18, 2013

Cyprus Has Backed Down a Bit

Today Cyprus back down on its decision to partially confiscate bank holders' deposits via a one time tax scheme supposed to affect every bank account holder.

Cyprus has to consider a more realistic way of remaining in the Euro zone as its government can not afford to punish people with bank accounts just because they have bank accounts. This is even more insane when we consider that the largest depositors are not even citizens of the EU (they are Russians).

What is completely unprecedented and incomprehensible is that EU officials actually recommended this partial confiscation to the Cyprus' officials.

I continue to rub my eyes in disbelief as this decision shows that EU officials have no idea how financial markets function in the real world. They are totally parallel to how the international financial system is set up and yet they take decisions 'off the cuff' about how it should work. What are they smoking?.

Political leaders are weasels that want to appear populist and will step on principles to support their positions. However their positions on Cyprus are abject, and despicable. EU should encourage positive capital flows and should promote the development of financial services as a way to revitalize the sagging European economy. 

Low level participants in the financial sector (bank account holders) need financial encouragement to leverage their own assets in the financial markets more and not less. Economic growth depends on market driven financial decisions and not on governments' abrasive intervention.

After all, even Putin can see that the EU is wrong and if the EU cannot see that then we are in trouble. Bada-boom trouble.

Sunday, March 17, 2013

Democracies Can Collapse in About One Day

This weekend, in Cyprus, the government decided to 'tax' all bank deposits with a one time 6.75% tax for deposits under 100,000 Euros and with a 9.9% tax for deposits totaling over 100,000 Euros.

I thought the theft of depositors' money or part of it was supposed to only happen in communism. This example comes to show that 'democracies' can decay pretty much overnight into pure communism.

The lifetime of any given democracy is close to 1 day, seeing how Cyprus is punishing bank account holders.

Seemingly it seems that it is more important for Cyprus to remain in the Euro zone than to abide by the principles that say that the government cannot take away private property from citizens without proper compensation.

This is stealing, pure and simple, in spite of the fact that the president is promising bank 'shares' in exchange for this outright confiscation, with no war threat or martial law in effect.

This incredible decision, supported and recommended (!) by the European authorities, given that Cyprus is in the Euro zone, shows -as clearly as daylight- what the fundamental problem with the European common currency is. The periphery always breaks the rules and the core countries need to step in to defend the common currency, even though the currency is the only common thread between periphery and core. This cycle cannot be broken without changing the rules 'on the fly', as it were. But jeopardizing democratic principles on the commonality spiel altar is reprehensible. Totally.

The officially backed theft of depositors' money is almost unprecedented as it indicates that taxation decisions were/are taken without public input and without regard to individual property rights.

The government of Cyprus has shown that it behaves like communist government, with excuses that are equally ridiculous.

Instead of exiting the Euro zone and affect fiscal policy in a democratic fashion, Cyprus decided to remain in the Euro zone and behave like a dictatorship. Paying for the government's mistakes over the years with private money is totally wrong on so many levels that I cannot afford to go over in a short post.

As we have learned in school, there is a trade-off scale that maps democracy to economic freedoms. The less economic freedoms there are (and this includes predictability around taxation) the less democracy there is, no question about that.

How can the common currency (Euro) continue to survive this mess? It is only a matter of time before the economic separation between nations will include again national currencies. Strong nations cannot continue to subsidize weak nations forever or else.

Democracy and economic freedoms demand private ownership be respected as it is the unbiased basis for economic growth. Threats to private ownership make it impossible for economic growth to achieve critical mass and sustain economic momentum.

Cyprus's example shows what 'peaceful' governments can resort to when needed and we should all learn from this that we need to protect our private property -with all our powers- against abusive practices of confiscation, even partial, and even when 'justified'.

Friday, March 15, 2013

Long Live The Process (and Science)

After only 2 days, this week, a new pope was elected in the Vatican Conclave (a sort of special election in church parlance).

Out of 115 cardinals, 77 voted for an Argentinian Jesuit (Jorge Mario Bergoglio) who took the name of Pope Francis.

The Papal election process is a tribute and testament to the process that takes over creativity.

Churches and religions love stable processes and they need an 'eternity' to change processes.

In numerous ways states have learned to preserve basic state processes (election, courts, military, etc.) from religion and perhaps this is a requirement to be considered a state to begin with. Religion taught kings how to make states work and exist forever.

Perhaps religion should also learn from the functioning of the state and start to use democratic processes to elect their leaders...
 Does that make the current process obsolete? Not really as the papal election outcome is somehow manageable and intellectually elevated and elevating for the crowds.

I believe that science and scientists should take a cue from the Catholic Church and create, cherish, and repeat stable processes (in perpetuity) to celebrate scientific events and accomplishments in order to attract more adherents to the scientific process and thought.

Wednesday, March 13, 2013

Police Officers are Thugs, Plain and Simple

Today I was reading a piece of news about an unarmed individual who was shot to death by an officer of the police department in Omaha, NE. In this particular case the police officer in an unmarked vehicle decided to shoot because he thought the passenger in a vehicle was reaching for their gun.

Police officers have a great responsibility and with that responsibility comes the obligation to first do no harm.

When police officers are allowed to shoot first and ask questions later then the state of affairs changes dramatically. We can each become victims of police abuses. And no matter how innocent we are the police are getting a free ride to lie.

The irony is that we are paying their salaries and benefits and they seem to enjoy those benefits immensely.

So, the police just thinking that somebody is reaching for their guns and they can open fire then we are all in their sights. We are all deer in their headlights.

The police cannot be allowed to act this way. We have to protest and demand that police follow simple and civil protocol.

Police officers are thugs. Plain and simple. We need to demand that the DA and our elected officials stop police brutality.

Tuesday, March 12, 2013

Mars is Just Like Earth - What Will Theologians Say About That?

Today, after a long journey and after drilling holes on rocks on Mars, NASA's Curiosity robot found out that Mars is, at least from a chemical composition perspective, just like our planet.

This is an unbelievable piece of news as we can now prove without any doubt that the entire universe is more like our plant. Or that our planet is not dissimilar to any other planets.

This shows, yet again, that our planet, our beloved home, is anonymous from a 'supreme being' viewpoint.

If I were a supreme being responsible for earthlings and after hearing the Mars news, I would just run away as I would have become philosophically obsolete and hence no longer needed.

After all, why should any Earth based creature believe in any supreme being if the entire universe is composed of the same matter and it is symmetrically spread all around us? What makes Earth and its inhabitants so 'special'? We are just a reflection of where we live in the universe and no supreme being is needed to point to us that we are special.

We are special, but not because a supreme being had anything to do with it, but rather because we have evolved the way we have on our own using mechanisms that are truly universal and explainable scientifically.

It is astounding to be free of theological constraints. It is even more astounding to ponder that we can become extinct as quickly as we have become humans, if not faster. Much faster.

Thursday, March 7, 2013

Tax Forms in the US: 149 pages for 2012

Yesterday we filed our taxes using Turbo Tax, the on line version.

It took us a few weeks to gather and group all the documents needed, import data from brokers, financial institutions,  and import W2 forms from our employers.

Certainly I am glad we are done and the most amazing thing is that when I printed a copy -for backup- I ended up with 149 pages for both federal and state taxes.

149 pages is an astounding amount of bureaucracy.

We paid under $80 for Turbo Tax and Intuit filled in all our forms electronically, almost magically.

The $80 price is amazing as had we had to fill the forms out by hand we would have given up and hired an accountant and that would not have been cheap, that is for sure.

Wednesday, March 6, 2013

Manchester United Bites the Dust!

Yesterday at Old Trafford in Manchester, England, Real Madrid managed to beat Manchester United by a score of 2 to 1 and thus eliminated the English super power house from the European Champions League.

Amen, brother!

This is awesome news to me as Man U is one of the most arrogant team on the face of the earth.

Thank you, Real Madrid, for bringing the reds down to earth. 

Man U supporters blame the referee but he had nothing to do with Real Madrid's clear and crisp victory.

Saturday, March 2, 2013

Beer Drinkers' Democracy

Anheuser-Busch (owned by InBev), the maker of Budweiser -among other beers- has been sued for mislabeling the alcohol content of their beers.

The news, however, is not that  Budweiser is a watered-down beer but that beer drinkers cannot be fooled forever by their 'kings'.

InBev's marketing department has been working for years to instill into the beer drinkers' minds the fact that Budweiser is 'the king of beer'. The irony is that a king can take decisions on almost any matter without any checks and balances and this fact may have been the leding factor in InBev's arrogance.

Beer drinkers' revolutionary step to require affinity to rules and labels leads to democracy and this leads to accountability.

We, as beer drinkers, can test the alcohol content by volume (ABV) of beer relatively cheaply and we can demand that beer makers abide by labeling laws. InBev cannot state on labels that a particular beer has 5% ABV when the beer has, in fact, 4.75% ABV.

By deliberately debasing their beer InBev has stepped into the 'pure' realm of kings (and crooks) and has started to steal from their own subjects/customers. Kings used to debase their gold -or other precious metals- currencies to create private wealth which they could use for wars or lavish court expenses.

I do not drink Budweiser but in very rare occasions and the beer debasing practices demonstrated by InBev prove to me that I should never consume any beer made by this multinational corporation as it may be deliberately debased in order to increase their profits unfairly.

Long live local breweries not owned by multinational corporations as I will always support locally owned breweries over the 800 lbs. gorillas.

Here is a list of beers made by InBev in case you want to stay away from them.