patrick.net

Remember, the design of any new financial system is to preserve the wealth of those in power and to transfer wealth from weak hands to strong hands.

Be very skeptical about any attempt to "tax the rich" or "redistribute wealth". These are the only two reasons behind such policies:

1. Populism
2. Barrier against new economic power

Any genuine attempt to fairly distribute wealth will include measures to tax the wealth directly, NOT income. Progressive taxation is an attack on becoming rich. Entrepreneurial people in the Silicon Valley, take note!

China announces $586 billion stimulus plan
Sunday November 9, 9:42 am ET

China announces $586 billion spending package to boost domestic demand

BEIJING (AP) -- China announced a $586 billion stimulus package Sunday in its biggest move to stop the global financial crisis from hitting the world's fourth-largest economy.

A statement on the government's Web site said China's Cabinet had approved a plan to invest the amount in infrastructure and social welfare by the end of 2010.

Some of the money will come from the private sector. The statement did not say how much of the spending is on new projects and how much is for ventures already in the pipeline that will be speeded up.

China's export-driven economy is starting to feel the impact of the economic slowdown in the United States and Europe, and the government has already cut key interest rates three times in less than two months in a bid to spur economic expansion.

Economic growth slowed to 9 percent in the third quarter, the lowest level in five years and a sharp decline from last year's 11.9 percent. That is considered dangerously slow for a government that needs to create jobs for millions of new workers who enter the economy every year and to satisfy a public that has come to expect steadily rising incomes.

AP
Latvian government takes over major bank
Latvian government takes control over No. 2 bank to save it from bankruptcy

RIGA, Latvia (AP) -- Latvia's government has decided to take over the nation's No. 2 financial institution after the bank ran into a liquidity crisis, an official said Sunday.

The government decided late Saturday to take a 51 percent stake in Parex Bank, the Baltic state's second largest bank by total assets, based on data that indicated the bank was headed toward insolvency, said Krists Leiskalns, press adviser to Prime Minister Ivars Godmanis.

On Saturday, Godmanis explained that Parex was functional but in need of liquidity. He also said the government had faced a choice of either taking control of the bank or allowing it to enter bankruptcy.

Brazil's president demands global financial overhaul with strong input from emerging economies

SAO PAULO, Brazil (AP) -- Brazil's president on Saturday demanded that major reforms of the international financial system include strong input from large emerging nations and said the collapse of modern banking structures is victimizing the world's poor.

Those who have the least stand to lose the most from a credit crunch that has slammed businesses from Brazil to China, President Luiz Inacio Lula da Silva said at a meeting of finance ministers and central bank presidents from 20 of the world's wealthy and emerging economies ahead of a Nov. 15 summit in Washington.

The Group of 20 nations must "formulate proposals for a substantial change of the world's financial architecture," Silva said. "This system collapsed like a house of cards that dragged down with it the dogmatic faith in the principles of nonintervention by the state in the economy."

In closed-door talks, leaders also discussed ways for nations to boost government spending to counter a global slowdown that could lead trade to contract next year for the first time since 1982, said World Bank President Robert Zoellick.

E.U. Wants Financial Reforms Soon
Leaders Look to Nov. 15 Summit for Concrete Measures to Prevent Further Crises

BRUSSELS, Nov. 7 -- The 27 nations of the European Union demanded Friday that the Bush administration join them in devising and putting into practice "strong, ambitious and operational" measures within 100 days to regulate international bankers more tightly and prevent repetition of the world financial crisis.

The appeal, at a summit of European leaders in Brussels, seemed designed to discourage the Bush administration in its waning days from trying to hand off difficult decisions on new international banking rules and other financial reforms to the administration of President-elect Barack Obama.

Rather, European leaders said, specific decisions should be made at a summit scheduled for next Saturday in Washington, in which Obama's financial advisers should be involved even though the president-elect himself is unlikely to be present. These decisions should be followed up with a second summit 100 days later -- when Obama is in office -- to review how the measures are working and decide on broader reforms aimed at changing the way the entire world financial system works, they added.

Running through the leaders' declaration was a desire that Europe's voice be heard more clearly in Washington as President Bush and his economic team prepare for the summit. The leaders emphasized that delay or soft-pedaling the need to act are unacceptable responses to the banking and market turmoil that rippled from Wall Street into Europe's most trusted financial institutions this fall and contributed to what is expected to be a severe and long-running economic recession across the continent.

"We demand to be heard, and quickly," said French President Nicolas Sarkozy, who holds the rotating E.U. presidency through Dec. 31 and who persuaded Bush to hold the upcoming gathering. He added: "I am not going to be participating in a summit of polite conversation."

Sarkozy said he had explained Europe's position Thursday in telephone conversations with Bush and Obama.

Without detailing his conversation with Bush, he suggested that some U.S. officials are trying to play down the need for immediate and drastic reforms. That would be a tragic mistake, he said, and pointedly noted that a Bush administration decision to allow the Lehman Brothers investment bank to collapse in mid-September triggered a crisis that has brought distress around the world.

"The crisis is worldwide, but we know where it started," he said.

Since the turmoil hit at the end of September, Sarkozy has pushed hard for a common European response and forceful government intervention to prevent bank failures on this side of the Atlantic. At the risk of irritating fellow European leaders, he has used his six-month presidency of the bloc as a bully pulpit to push them toward decisive measures and, beyond Europe, to call for an end to the "folly" of unregulated international banking and investment.

The financial crisis calls out for such decisive leadership, he has told associates, and decisiveness has been a trait of his political career -- to a degree that some qualify as pushy and rash. The satirical French newspaper Le Canard Enchaine, which mercilessly mocks the country's leaders, this week portrayed his wife, former model Carla Bruni, as calling him "my husband the master of the world."

In explaining the strongly worded European appeal, Sarkozy said Chancellor Angela Merkel of Germany and Prime Minister Gordon Brown of Britain -- both of whom have called for caution -- enthusiastically supported the call to Washington for swift and concrete action next Saturday.

"We do not want to go from no regulation to too much regulation," he said, "but we need to change the rules of the game in the financial domain."

Chief among the demands agreed on by the E.U. heads of state and government was tighter regulation of banking and investment markets. "No financial institution, no market segment and no jurisdiction must escape proportionate and adequate regulation or at least oversight," they said in a statement. The regulations must also cover rating agencies and speculative hedge funds, they added.

In addition, the leaders said international financial exchanges must be more transparent, thus more subject to government controls, and pay systems that encourage excessive risk-taking by traders must be changed. Colleges of supervisors should be set up to monitor international financial groups and the way they are regulated by national authorities, and the International Monetary Fund should get more authority to establish an early warning system, they said.

The declaration also called for attention to long-term economic concerns, such as ending hunger, fighting poverty and slowing climate change. But Sarkozy and the European Commission president, José Manuel Barroso, said the ultimate goal of a series of summits beginning next Saturday is to build a new financial system to replace the dollar-based pattern of exchanges inherited from the Bretton Woods conference of 1944.

At that time, as World War II was coming to a close, the U.S. dollar was the world's only currency of reference, Sarkozy said. But times have changed, he said, and now the euro and other currencies have a place in world financial exchanges, a new reality that he said should be reflected in the rules.

Unsaid but clearly present in his remarks was a touch of long-standing European resentment at the United States' ability to run large budget deficits on the strength of the dollar's role as an international investment standard, a privilege European governments do not enjoy even though their currency, the euro, has become one of the world's strongest.

Any genuine attempt to fairly distribute wealth will include measures to tax the wealth directly, NOT income.

While you may be right that this is the only way possible, it doesn't sound practical. How do you determine what is "fair?" There would be a tremendous danger that you would unfairly penalize savers and those who made their wealth while bettering society.

The exception would be the estate tax. Dead people should be taxed up the wazoo - there is no danger in being unfair to them as they are dead and should cease to control assets (after accounting for what their surviving dependents need to subsist).

U.S. Patent 102,344,569: Methods and Apparatus for Efficiently Separating Money from Suckers

Abstract: A method is described whereby mass financial panic is induced, followed by a "Trojan Horse" method of implementing legislation that appears to benefit the taxable populace while actually efficiently transferring wealth from this populace to more wealthy individuals.

WALL STREET, Nov.8 (CashNews) — A new financial system was unveiled today at a meeting of the world’s financial superpowers. Said Mr. Warbucks, head of the committee, “We plan to fight the erosion of the middle class via a combination of policies called Keep You Right Where You Are, with an underlying strategy of Lowered Expectations.” Skeptics, bloggers and protesters vehemently objected to the new plan, calling it a way to lock in the status quo and prevent class advancement within developed nations. The German Chancellor was quoted as saying, “Ja, socia1ism’s not so bat, you big American beh-bies! Zhis is fer der best, mine proletariat!”

TOB says: Perma, check out ‘hyperlink’ technology, its the next big thing.

Whoa, crazy. You fringe bloggers will try anything, won't ya! :o

Seriously Permarenter, it would be nice if you posted just the first few sentences and then a link to the rest. I come here to read the discussion threads, not entire C&P articles lifted from other sites.

I don't like Sarkozy any more. He is nothing but a populist.

But times have changed, he said, and now the euro and other currencies have a place in world financial exchanges, a new reality that he said should be reflected in the rules.

Yes, times have changed and Europe will go down the drains.

Mr Sarkozy, where is the Kärcher you promised?

I like the idea of taxing the dead. They never complain.

Still interested in Henry George's idea of a single tax on land too. It's obviously very fair, public, inescapable, and has the nice benefit of driving down land prices too.

If you keep all your wealth in cash rather than land, fine. You pay no tax. But try to use it -- everyone in society will have to charge you because they themselves had to pay the land tax.

Though then there is the problem of cheap food imports putting farmers out of business.

The only real new financial system will one where the central banks/bank cartels are dismantled and the markets become free again.

That will not happen. If anything, most of the Western world will become more socialized, thereby leading to the ruin of their economies.

Any emerging country that has the brains to take advantage of this and make their system more free will become more prosperous. I don't know that any of them will though.

I do not mind if land tax is charged according to the rental equivalent value. It is a type of consumption tax.

Though then there is the problem of cheap food imports putting farmers out of business.

We better conquer that foreign land so that everybody in the world pays tax to Uncle Sam. LOL! :lol:

The only real new financial system will one where the central banks/bank cartels are dismantled and the markets become free again.

Amen, brother!

That will not happen. If anything, most of the Western world will become more socialized, thereby leading to the ruin of their economies.

Yep.

Any emerging country that has the brains to take advantage of this and make their system more free will become more prosperous. I don’t know that any of them will though.

We may have to wait 200 years for that to happen. For now, we have a new dictator. It is called the tyranny of the majority!

Even Switzerland and Hong Kong are slowly being poisoned by socia!ism.

but the majority of Americans are White, free market, WASPs.

... and Boomers. "Hmm, let's tax those Gen-X slackers for our retirements."

Result: high income tax rate + socialized male potency drugs

Peter, when has Switzerland ever not been socia1ist in the modern age?

Half of their economy is based on a great scam. You put money in Swiss banks, out of the reach of your own oppressive government tax policies, and in exchange their government skims off a small percent of your wealth each year. In exchange, the Swiss bankers get discounted access to massive amounts of capital.

Their game will be slowly busted by Singapore. Lichtenstein and the Cayman Islands perform the same legal money laundering function, but I don't think anybody really believes that their governments could restore your capital in the event of a banking meltdown. People can reasonably have faith in recovery in Zurich (barring a massive meltdown even bigger than this one), and now in Singapore because they have stockpiled so many U.S. Treasuries and Euro-denominated assets.

Money laundering is a symptom of excessive government regulations.

TOB: Americans might predominantly be WASPs, but most of them couldn't define "free market" without Wikipedia. J6P is a capitalist during a bull market; J6P is a socia1ist in a bear market. It's a corollary to "There are no athiests in foxholes."

Switzerland is still safer until all warring dictators move their money away. ;)

J6P is a capitalist during a bull market; J6P is a socia1ist in a bear market.

Hence socialized Put options. (e.g. The Greenspan Put)