The future is bleak...

For future reference I will post here a short post in Portuguese:

 O futuro da humanidade é negro, e uma das principais razões para isso (mas não a única) é o estatismo crescente, potenciado pelas multiplas vertentes da tecnologia que pemite aos estados controlar cada vez mais completamente todos os aspectos da vida das pessoas, que cada vez mais se aproximarão de formigas perfeitamente alinhadas, igualizadas, conformadas e controladas como robots pelos overlords politicos.

Para quem já leu ficção científica, a futurologia nesta linha é rcorrente.
Usualmente, os herois são pessoas integradas em pequenos grupos que tentam fazer frente aos poderes instituidos, opressivos, dos estados hiper-controladores.

Pois bem, os sinais deste tipo de "progresso" nas vidas reais que vamos vivendo são multiplos.
Alguns são "progressos" bastante claros e até obvios, neste sentido, outros são mais marginais e menos claros - mas continuam a ser importantes para se atingirem os estádios finais deste tipo de utopia negra (como estádio final, imagine-se uma Coreia do Norte mundial, com tecnologia de vigilancia e controle muito mais avançada do que a que eles usam actualmente).

Um dos progressos MAIS OBVIOS é o fim do dinheiro.
O dinheiro foi uma invenção maravilhosa:
Algo que facilita as trocas de bens e serviços de forma espantosa (imagine-se trocar tempo de trabalho por bens fisicos, imaginemos que alguem trabalhava para o dono de um rebanho de carneiros e tinha de dar tempo de trabalho até atingir o valor de um carneiro inteiro para o poder receber como pagamento do seu trabalho, etc..).
O dinheiro tambem pode ser usado para poupar valor acumulado: Podemos conservar todos os meses um pouco do que ganhamos, para depois quando temos acumulado o suficiente podermos comprar coisas mais caras e mais raras, ou para vivermos em periodos em que não temos rendimento.

No entanto, para os estados actuais o dinheiro tem um problema terrivel:
As transacções em dinheiro são, por definição, anónimas.
Não deixam um rasto electrónico (nem em papel). Se se quer controlar tudo o que as pessoas fazem com os seus recursos (com o seu dinheiro) é preciso construir mecanismos de controle paralelos: obrigações de comunicação de transportes, vigilancia (por fiscais humanos  disfarçados de consumidores comums) sobre registos de transacções sob a forma de "facturas", etc..

Por isso, os governos tem estado a tentar limitar cada vez mais o uso do dinheiro.
Já discuti isso, com base na progressiva legislação que tem saido em todo o lado para impedir transacções de valor significativo, pagas em dinheiro.
Lembro-me em particular do caso da Itália, há um par de anos, que fez sair legislação muito radical sobre isso (limitando as transacções pagas em dinheiro a uns 500 euros de valor maximo, se não me engano).
E em Portugal tambem existe legislação a impor limites, embora usualmente não se lhe ligue muito.

Pois bem em Israel estão já oficialmente a estudar o fim absoluto do dinheiro!

http://www.zerohedge.com/news/2014-05-27/government-plan-would-transform-israel-world%E2%80%99s-first-cashless-society

Ultima nota:
É claro que a partir dai o estado vai ter acesso a informação completa sobre como cada cidadão gasta até as quantias mais infimas, e vai poder cobrar TODAS as taxas que existem (e que certamente irá inventar), e vai lembrar-se de multiplas formas de condicionar a vida das pessoas para as obrigar a gastar os seus recursos só em bens e serviços que lhes pareçam mais "virtuosos" e mais uteis ao "bem comum".

Mas há um aspecto adicional:
Estando TUDO em suportes informaticos ao invés de em dinheiro fisico, e (para que as coisas funcionem) estando tudo em rede (e não em servidores fechados em salas profundas e desligados de todas as interfaces com o exterior) é obvio que se criam aqui vulnerabilidades que antes não existiam.
No limite um pais (ou pelo menos a sua economia e a vida das pessoas) poderá ser completamente arruinado por um bom ataque informático...


Enfim, temos o futuro que merecemos, com a nossa tendencia média (e por isso democraticamente maioritária) de preferirmos ser carneiros dirigidos (governados, financiados, igualizados, etc.) pelos estados e pelos politicos,  ao invés de sermos individuos autonomos com poder para (e necessidade de) governarmos as nossas proprias vidas...

Para referencia futura vou guardar este texto, mesmo em Portugues, no meu ex-blogue.

Abraço,
Pedro




And, so that the source is not lost I will copy/paste below the article referenced above:

(from here: http://endoftheamericandream.com/archives/government-plan-would-transform-israel-into-the-worlds-first-cashless-society)

Government Plan Would Transform Israel Into The World’s First Cashless Society

By Michael Snyder, on May 26th, 2014

 

Will Israel be the first cashless society on the entire planet?  A committee chaired by Israeli Prime Minister Benjamin Netanyahu’s chief of staff has come up with a three phase plan to “all but do away with cash transactions in Israel”.  Individuals and businesses would still be permitted to conduct cash transactions in small amounts (at least initially), but the eventual goal is to force Israeli citizens to conduct as much business as possible using electronic forms of payment.  In fact, it has been reported that Israeli officials believe that “cash is bad” because it fuels the underground economy and allows people to avoid paying taxes.  It is hoped that requiring most transactions to be conducted in cash will reduce crime and help balance the national budget.  And once 98 or 99 percent of all transactions are cashless, it will not be difficult for the Israeli government (or any other government) to go the rest of the way and ban cash transactions altogether.  But is a cashless society actually desirable?  This is a question that people all over the world will have to start asking as governments increasingly restrict the use of cash.Back in September, it was announced that the Israeli government had formed a committee to “examine ways to eliminate cash from the Israeli economy”…

The government on Tuesday authorized establishment of a committee that will examine ways to eliminate cash from the Israeli economy – the better to prevent citizens from cheating on their taxes. The committee will be chaired by Harel Locker, director of the Prime Minister’s Office.

This committee had the full backing of Prime Minister Benjamin Netanyahu, and some of the goals of the committee included finding ways to increase tax revenue and prevent money laundering…

Officials in the Prime Minister’s Office declared that “around the world, it is recognized that cash is a key element of the illegal economy and money laundering. It allows a wide gap between reported and actual incomes, with the corresponding effect on tax revenues.” By eliminating cash, the PMO said, “it will be possible to expand the tax base, and prevent money laundering.” The committee will study the issue from all its perspectives and make recommendations, the PMO said.

The committee has had quite a few months to examine these issues, and now they have come back with their recommendations.  Just this week we learned that a three phase plan is being proposed…

A special committee headed by Prime Minister Benjamin Netanyahu’s chief of staff, Harel Locker, has recommended a three-phase plan to all but do away with cash transactions in Israel.
The motivation for examining a cash-less economy is combatting money laundering and other tax-evasion tactics, thereby maximizing potential tax collection and greatly expanding the tax base. This is important considering the enormous strain put on Israel’s national budget by the army, healthcare system and other public services.
The committee estimated that the black market represents over 20 percent of Israel’s GDP, and cash is the facilitating factor. Cash enables tax evasion, money laundering and even financing terrorism.

So what do the specifics of the plan look like?
Well, there will be very strict limits on the use of cash for individuals and businesses, any violations will be considered criminal offenses, and all Israeli banks will be required to issue debit cards to all account holders…

What the committee would like to see happen, pending government approval, is greater restriction on the use of cash, limiting the use of checks as a means of payment and exchange for cash, and promotion of the use of electronic (and therefore verifiable) means of payment.
The following guidelines were set out by the committee for the short-term:

• Limit business transactions done in cash or by check to NIS 7,500 ($2,150) immediately, and reduce that further to NIS 5,000 ($1,433) one year from the date of legislation;
• Limit private transactions done in cash or by check to NIS 15,000 ($4,300);
• Any violation of these limits would be a criminal offense warranting a stiff fine.

In conjunction with these new restrictions, Israeli banks would be required to provide all account holders with debit cards to further promote electronic payments.

But of course this move toward a cashless society is not just happening in Israel.
In Sweden, it is estimated that just 3 percent of all transactions involve cash at this point.  In fact, according to an article in the Washington Post, some Swedish banks do not handle cash at all anymore…

In most Swedish cities, public buses don’t accept cash; tickets are prepaid or purchased with a cell phone text message. A small but growing number of businesses only take cards, and some bank offices — which make money on electronic transactions — have stopped handling cash altogether.
“There are towns where it isn’t at all possible anymore to enter a bank and use cash,” complains Curt Persson, chairman of Sweden’s National Pensioners’ Organization.

And the U.S. is starting to move in that direction as well.
According to a study conducted by MasterCard, approximately 80 percent of all consumer transactions in the United States are now cashless.
But isn’t there a downside to all of this?
Just about everything that we do in life involves money.  So yes, a government can track electronic payments to make sure taxes are being paid and money laundering is not happening, but it would also enable a government to do so much more.
If a government can track all of your transactions, it will essentially be able to monitor everywhere you go and pretty much keep track of virtually everything that you do.
If you doubt this, just try to live without any money some time.
You won’t get very far without putting some gas in your vehicle.
And without being able to buy food, you will get hungry pretty quickly.
Are you starting to understand?
This is why governments love the idea of moving toward a cashless society.  It would give them an immensely powerful surveillance tool.
So let us hope that this does not happen in Israel or anywhere else in the world either.

Meanwhile, in Argentina...

I absolutely had to post this one, even so soon after the previous post.
The previous post (about the new creative tax in Italy) should scare us all.
This one is mainly funny.

When the most retarded brands of socialism (* - see below) burst, this kind of thing happens:
http://www.zerohedge.com/news/2014-02-16/peak-stupidity-argentina-fines-walmart-violating-fair-price-pact-urges-citizens-deno

Naturally, this only happens much closer to the end of the line.
(And things are really getting to a conclusion, in Argentina, Venezuela, and such.)


(*) - One may argue that all socialism is retarded, but here I'm referring to the MOST retarded branches: The mugabian, chavist, cristinarist implementations of socialism.

Confiscation pressure over the european citizens...

Theory and thoughts about our path:

The "fiscal" pressure (the confiscation of personal wealth by the gigantic, parasitic, state collectivist entities) over the European citizens is already enormous (as we know quite well, unfortunately) but it keeps growing.
And it will still keep growing for a long time, until we live extremely poor lives (poor beyond material stuff, but certainly also very poor in material terms), totally controlled by the state.
Naturally, the state itself is ruled by nice politicians in charge, that can save us from having to think, from having the power to decide anything for ourselves - and they will live well, both in material and other terms, since they will deserve it, because their task of ruling us all is very demanding...
It is the way of North Korea, or of an ant collective...

Onward to concrete news:

A nice new tax (of 20%) over all personal transfers on money into Italy.
http://www.zerohedge.com/news/2014-02-16/money-launderer-until-proven-innocent-italy-imposes-20-tax-withholding-all-inbound-m

Pay up (automatic confiscation by the involved banks), then try to recover some of it, if you can (hehe)...

Way to go Italy, show us new, creative, ways of confiscation, because many other countries/states need these ideas as much as you do...

And, to finish with a return to theory and thoughts...

A short and sweet text about our future, that develops my thoughts, above, and gives them some specific references:
https://www.caseyresearch.com/articles/george-orwells-mistake

The text is quite short, and is certainly worth reading.
The conclusion is simple and clear:
"George Orwell, it seems, was mistaken only about the date."

A sentence I liked a lot is:
"Karl Marx had such a plan, although he envisaged a more benign system of universal brotherhood"

Venezuela - Lets avoid this future at home...

Things are REALLY reaching a conclusion, in Venezuela.

Lets start with an introduction, something more general in nature, so that we may learn something useful from the dire occurrences happening there at this precise moment:

Socialism an economic crime, usually with millions of victims (the victims are usually the majority of the population of the affected countries - all but the leaders in power, their direct entourage, and the goons that enforce the regime).
Its effects include individual (but widespread) impoverishment and (so) worse conditions of life for almost everyone. The effects also include (directly accountable) deaths due to the effects of collective impoverishment, that inevitably results in worse medical care, less ability to preserve the environment, etc.. Naturally, these last effects are increased by the strongly collectivist nature of socialism: What matters is the collective, not the individual. The importance that may still be attributed to individuals (regarded as figures, as very small parts, very insignificant parts, of the collective) is as symbols (when they can be conveniently used as such) for the promotion of the "common good".

Socialism (and collectivism in general) is also a political crime since, almost (should almost be used here?) by definition, it integrates a full disregard for individual freedoms and rights. Everyone must conform to strict rules (decided by the enlightened rulers that always know better - Stalin, Ceausescu, or Kim Il Sung are fine examples), and dissidence is always cut short terminally.

Socialism is also direct violence!
(And that is the reason for this post and the connection and motivation for this introduction.)
Socialism always involves revolutionary processes.
It means expropriating the property of those that owned things (farms, factories, stores, public listed companies, above than average houses - or all of them). It means eliminating personal rights (to free reunion, public protest, free communication of different political views, etc.). It requires blood to implement and enforce.
The practice of the implementation of every socialist society, in every socialist country that ever existed, confirms this. Are there exceptions to this rule? All I can think of are confirmations of the rule: Russia, China, Cuba, Zimbabwe, Cambodia, North Korea, Vietnam, all the ex-socialist/communist countries of "Eastern Europe" occupied by the Soviet Union in WWII... In every one, the implementation of socialism was done through extreme violence and countless deaths. Are there exceptions?
More curiously, the socialist/communist theory also defends this!
Most (all?) of the theoretical luminaries of full-socialism/communism assumed/defended clearly that implementation of socialism required violence. (Again, are there exceptions? I can't think of a single one... Not Marx, not Lenin, not Trotsky, not Mao, not Castro, not Pol Pot, not Mugabe...)

In Venezuela, in particular, the acute phase of full-socialism implementation is now occurring.
Please (for YOUR sake, for the sake of your loved ones, for the sake of us all - to prevent a similar process, in the near future, where you live...) check what is happening there:

http://caracaschronicles.com/2014/02/13/the-thing-about-colectivos/

http://caracaschronicles.com/2014/02/12/mayhem-in-caracas/

http://caracaschronicles.com/2014/02/12/hey-violent-opposition-check-out-your-victims/

For an explanation off all that (less emotional, more articulate and complete that the raw news of the previous links) read this:
http://caracaschronicles.com/2014/02/14/samsara-chronicles/

And, if you can read Spanish, please read this, out today, from one of the leading Venezuelan newspapers:
http://www.el-nacional.com/politica/Estudiantes-detenidos-torturados-incomunicados_0_355164768.html

Final note:
Consider that, in Venezuela, things started with democratic elections, and evolved from there...
(They usually start worse from the beginning, with war (civil war or international war), civil or military coups, etc. - and evolve from that.)

So, in short (if there is anything useful to learn from this):
Socialists and communists are criminals, and must be regarded (and fought) considering that fact.
Polite political arguing produces nothing on them, since they view their objectives as the only valuable thing to achieve, and base their thought processes in pure propaganda instead of serious debate of ideas...
They just use the naive democratic political processes of our decaying countries as a convenient (but transient) mean to achieve their ending goals (and this is so just when they don't have the direct force to achieve power through more expedite means...).
Once in power that transient mean they use to achieve their end, must be terminated - least in demotes them from power, again! (Besides being true monomaniac believers in their cause, "democratic alternance" is always annoying when you are already in power...)
Delaying resistance to their rise to power to very last stages of the process, as in Venezuela, is inviting what happened there.

PS.

For those that may think that my position on this is somewhat "radical", or extreme:
This post is NOT radical or extreme!
Extreme is to have a daughter (or a son) kidnapped by the armed goons of the regime (because "arrests", in Venezuela, at present, are not the normal arrests of a civilized country, they are the communist version - see the link, already above), tortured, raped, and finally "disappearing", simply because she (or he) participated in a peaceful student protest that the communist authorities did not not like.
Now, THAT is radical!

No need to work, we provide for your leisure...

Blogging about this kind of stuff is next to useless, because people prefer to ignore realities, and to go on living with (as much as possible) less care about things that are unpleasant and hard to control.

As such, page views in my posts are next to zero, and the work involved in writing them with care is unjustifiable.

So, I have 2 possible approaches: Give this up, or just start posting with a lot less care (and work).
I will give both approaches a try, and see what works better for me...

In this vein, here goes a new post, about the realities of the welfare state, that are the most extreme form  of society destruction for our rich, rotten, western civilization countries.

The votes in our democracies are all worth the same. It does not mater if one is a productive, useful member of the society, or if one is a parasite that just wants a free ride (on the back of those that still are willing to make efforts and to contribute with something useful ).
Naturally, since the resources to live a soft life don't fall out of the sky (be it food, clothing, lodgment, cellphones, cars, whatever), they still need to be produced by someone, they still need investment in factories, in agriculture, in mines, they still involve market risks, bankruptcies risks, savings done over time (i.e. deprivations) to get the resources to invest,etc..
The free riders just need to vote on the "liberal" lefties that will redistribute more and more to implement "social justice", and fight poverty, and all those "nice" easy, appealing feel-good approaches.
And it is easy to get majorities voting for entitlements.
Its is the well known curse of democracies:

Anyway, this is (for the moment) still extreme, and shows how socialism is being implemented FAST in the US, by the obamas that at present rule, there:

http://www.zerohedge.com/news/2014-02-09/wapo-praises-joy-being-untethered-and-unleashed-job-freeedom-unemployment

So, there!
Considering my new policy of reducing work in this blog, go and read the ZH post on this, and read the funny original article defending that (robing the productive - something that is obviously left unsaid) to pay for the entitlements of those that don't want to work is the good, correct, moral, thing to do:
http://www.washingtonpost.com/national/health-science/they-quit-their-jobs-thanks-to-the-health-law/2014/02/08/7b10df46-901a-11e3-84e1-27626c5ef5fb_story.html?wpisrc=nl_headlines

No more comments are really needed.
In the future we will all be able to live of some very limited number of slaves - that will have to work really hard.
If we can continue to convince them that saving, investing, taking risks, and working really hard is only natural, because the state needs their taxes to redistribute (since they are the favored by the capitalist society unfair workings, and so many need their work to live as (free-riding) relatively dispossessed  poor) so much the better.
If not, well, things will turn out badly for all...

Peace!

The degradation in some countries is really Exploding!

Particularly in Latin America, reality is catching up with the "nice" socialist political dreams, and things are getting really bad:

http://www.zerohedge.com/news/2014-01-24/20-early-warning-signs-we-are-approaching-global-economic-meltdown

The biggest lesson is not what is happening (because it was expectable, and even inevitable, and the signs were clear to everyone paying attention).
The lesson here is that these things tend to start evolving slowly and then, suddenly, they degrade EXTREMELY fast.

Again Argentina (and Venezuela, and all our countries...)

I will keep this post short.
The idea is just to link a very recent mainstream news article with some generic info on the most recent Argentinean developments:

http://www.nytimes.com/2014/01/25/world/americas/argentina-eases-currency-controls-but-citizens-are-not-reassured.html?_r=0

I will just comment two specific points:

1.
Notice the blackouts.
They are a very strong sign of extreme economic unbalances, and of serious societal disaggregation.
They happen in every decaying county (in South America Venezuela and now Argentina - the most extreme socialist experiments in that zone - are excellent examples), and can be considered one of the worst consequences of failing societies/economies, since they tend to aggravate things even further, and prevent normal life and normal economic activities.
Just to illustrate, for some, having no electricity may be (or seem, at first...) just a limited inconvenience, although it gets worse when it lasts, or when it is recurring (frozen stuff gets ruined, it is impossible to use computers or TV, it is impossible to charge cell phones, etc.).
But if you use a wheelchair and really need an elevator to get out of (or back to) your 4th floor apartment, lack of electricity is more than a simple annoyance...
Also some crucial activities get seriously degraded. Just think of hospitals, supermarkets, schools, factories, etc..
2.
Note relatively exotic things failing, like (in the case described in the article) the possibility of simply using a plane to get out of those countries.
Lack of ordinary products in the stores is a lot more common: things like toilet paper, milk, medicines, whatever (the specific things missing tend to vary according to the details of each country internal production).
This kind of (more or less) random failings are the inevitable result of interventionist governments creating more and more unbalances, more and more arbitrary economic destructive rules, in the process of trying to solve the problems they already created.
It is the very ordinary situation of having some politicians totally disconnected from the realities ruining the economy, and then having those same politicians trying to solve the problems they themselves created - usually by applying even more extreme versions of the policies that created the original problems...

Expect these problems closer to home, later on, when countries that now seem rich, stable and in good working order (like Argentina seemed to be some years ago) follow similar paths (Argentina's path can be argued to be just slightly more socialist than most of Europe, the USA, etc.)...

Take care!

A funny (if disgusting) piece...

While some politicians are aware of the realities of life and even of the present "slow crash" of our civilization (see the previous post in this blog), others are in the exact opposite situation.

In last week´s economy supplement of the biggest and most influent Portuguese weekly newspaper ("Expresso", economy supplement, from 11 January 2014), I found a text that must join the top 10 list of the stupidest pieces of opinion I ever read.

I is titled "Mais austeridade, quem nos acode?" (in English "More austerity, who will save us?"), and with this title, I thought: This must be a fun one, lets read it.
Note:
"Austerity" is the dirty word that left propaganda uses to classify the limited efforts to slightly reduce state spending in the broke "troika assisted" European countries (and also in some pre-broke counties that are just being "assisted" by extremely lax QE policies of the central bankers). In Ireland, Greece, Portugal (and in smaller scale in Spain, Italy, etc.) populist/social-democrat governments, forced by lack of money to spend even more, have been trying to somewhat reign in spending.
The extreme left claims that compressing state spending from, lets say, 50% to about 47% of GDP - google "fauxsterity", or just look it up here...) is a deliberate policy pursued by the "neo-liberal" (the insult applied by the extreme left to the social-democrats) to punish the poor, out of pure meanness.

Back to the text in Expresso (see the illustration just below).

I will not try to translate the text, since it defends the usual: reigning in state spending is wrong, increasing spending is the right course to solve all the society's problems, and to generate the economic growth that is needed to service the state debt, etc..
It suffices to say that this text would put even Krugman to shame with its superficiality and disconnection with reality - and (because they function in a circular propaganda ring) it was promptly grabbed by the leftist minions that intend to attain power in Portugal in the next elections to justify another small attack on the present "austerity".

So, since the text was so particularly stupid, and since the author is identified by name but classified simply as "economist", I went to look up who he might be...
And BINGO!
He is nothing less the "secretary of state" (a junior minister, in Portugal) responsible by the state budget during the previous government (2005-2011).
That was the government that (following 35 years of uninterrupted public deficits, European Union warnings over excessive deficits and so on), overspent so much that market lending to Portugal ceased, forcing that same government into signing a fast agreement with the "troika" of last resource official lenders, the agreement that enforces the present "austerity" measures!

Even during his tenure in that government, the author of this text in "Expresso" was an especially funny representative of delirious Keynesianism.
Once, in an important public talk, he went as far as classifying his (and his government) policies as "Keynesianismo Iluminado" ("Enlightened Keynesianism"), in the best North Korean lingo...

Obviously, in more serious countries, or in more serious times, this funny specimen would be thrown in jail to rotten there, or worse. After all, his government and his policies bankrupted a country, and created lots of pain and sufferance to millions (from mere disrupted careers, marriages, etc., to occasional effective deaths due to necessary reduction of medical spending).
In Portugal?
He is now a consultant for the central bank ("Banco de Portugal"), and is seemingly well-regarded in the hare-brained Keynesian press of this funny, de-evolving, small country...

Some top politicians are aware of our civilizational decay

This post is important, but it does not need an introduction.

It is a link to a short news piece that shows that (even) some top politicians are aware of the present decay of our societies, and of its main reasons:
George Osborne issues 'reform or decline' warning to EU

Three short comments:
1.
I fully agree with the views expressed by Osborne in this subject. Also, there are other well known politicians that share the same views, like (for a single example) Ron Paul in the USA.
2.
It is obvious that this problem spreads outside Europe. Presently, the US is a very strong example of the same problem, but we could add just about any other country based on similar "western" approaches.
3.
The fact that some top politicians recognize the problem, and speak about it publicly, will not change the inevitable course of our societies, no more that a blog like mine.
During the final decline of any great previous civilization (the Roman Empire is the best studied case, but there are many other examples) many persons noticed the decline, spoke about it, fought against it, to no avail.
These civilizational decline processes are well studied, and there are great books about them.
Basically, we can only watch them happen, and navigate them the best we can, to reduce the pain at personal or familial levels...

Evolution in Argentina

Argentina is a wonderful example of how the inevitable evolution of democracies towards greater entitlements at the cost of those that for the time being remain productive (or, in more generic terms, socialism...) destroys countries and societies.
In Argentina's case, they call it "Peronism" - a populist, welfare-state, socialist approach that started 70 years ago and today, in a radicalized version, remains the main inspiration of the present socialist government.

What makes Argentina such wonderful example?
Mainly the fact that Argentina had everything to be one of the richest countries in the world.
A relatively homogenous and industrious population coming from a wide European basis, amazing natural resources, wide spaces allowing for cheap, large-scale agricultural production, etc..
In fact, between the beginning of the XX century and the start of peronism, around 1945, it really was one of the richest, most developed, and fastest growing countries in the world!
In short:
- By 1900 Argentina was the 8th richest country in the world (on a per-capita basis).
- By 1929 Argentina was the 4th richest country in the world (on a per-capita basis).
- By the end of WWII (1945) Argentina was arguably the richest large county in the world (!!!) in a per-capita basis (or the second, behind the USA, depending on the exact metrics used).
That was the moment Peronism hit the country. Argentina's downfall started, and was quite fast (we can measure it in a single lifetime, about 70 years).

The fact that Argentina's recent history is so interesting and could teach so much (if people were ready to learn from the mistakes of the others) means there is a vast literature about this subject, from books (a good example: "Argentina: An Economic Chronicle. How One of the Richest Countries in the World Lost Its Wealth") to a vast number of online articles.
A Google search with the 3 words "Argentina" "economic" "downfall" finds about half a million entries (!!!), and good articles about the subject can easily be counted in thousands!
Some examples:
- Argentina's collapse - A decline without parallel

- How to Destroy a Rich Country

- What Happened to Argentina?

(But, really, there are literally thousands of articles about it - although, obviously, some are better than others.)

 

Anyway, the funniest part of the story is the full blown economic destruction of the country in the last 15 years, at the capable hands of the Kirshner couple (first Nestor, then Cristina).

Cristina, in particular, seems bent on terminal destruction of the country, at a level close to Chavez/Maduro in Venezuela, Ceausescu in Romania, or Mugabe in Zimbabwe.

  

Anyway, in Argentina things keep evolving in line with what could be expected.

State spending grows to fulfil the populist promises that (still) win elections; economy gets worse and worse; tax collection get more and more insufficient to cover state spending; state "regulation” (including administrative price fixing, export limitations, extreme currency controls, etc.) increases, to try to prevent reality from happening; the only "solution" is printing more and more fiat money, ending in hyperinflation, ruin, and chaos...

Following regularly the news of these countries is very interesting. At present there are several cases of extreme socialist approaches in Latin America, but I particularly like to follow the evolution of Venezuela and Argentina.
What is happening there is a good lesson to prepare us all for the future of our own countries, and of our civilization in general.

 

In this spirit, here are a couple of recent articles about the new, improved, Price Controls 2.0 in Argentina:

 - Argentina to Tighten Food Price Controls as Inflation Quickens

 - Argentine peso at new lows as food price controls take effect

 

 

 

 

 

 

"Tax amnesty" initiatives and public deficit in Portugal

A short post about a specific Portuguese subject: The very recent "tax pardon" that made so many happy national headlines (I will link a single example, but I'm sure all my Portuguese friends saw many others), since it surpassed expectations.

Some quick specific points:

The overall amount of taxes paid under this most recent "tax amnesty" was 1253 million euros, well above the 700 millions that the government had expected.

Those 1253 million  will lower the Portuguese 2013 public deficit by about 0.7% of the GDP. This in turn will allow the government to attain (and even beat!) the 2013 public deficit of 5.5% of the GDP that was accepted by the troika (the financial rescue group that integrates the IMF, the ECB and the EU itself).

Of course, those 5.5%, were a recent upward revision of an already upward revised prediction of 4.5%, from a year ago. But what does that matter? Everybody is happy, since it seems that the most recent official deficit target will be beaten.

Now, for the reason of this post:
This was not a real tax amnesty (the direct translation of the Portuguese expression is more colorful: "fiscal pardon", since the original is "perdão fiscal").
This was just a time window during which the families and companies that had to pay tax debts (mostly already identified and in the process of being collected), could pay those debts with a reduction of the fines and interest that would ordinarily be applicable.
As such, this merely anticipated (to the last 2 months of 2013) the collection of tax debts that would normally be collected (with some additional fines and interest, now forfeited) during the next few months.
At most, this scheme may have collected a very limited proportion of debts from entities that some months from now could have gone bankrupt, and end up not paying those debts. But that proportion was certainly not relevant, since companies going bankrupt in short order probably would not have now the funds to pay the debts upfront and, anyway, the Portuguese bankruptcy laws place the State (specifically, the tax and "social contribution" authorities) at the top of liquidation precedence.

So, in short, this scheme just anticipated already expected tax collection, and just saved the last revision of the 2013 deficit at the cost of worse forward deficits!


Note:
To contrast this with a real tax amnesty (or "fiscal pardon"), in Portugal, we don't need to go back many years... The last one was in 2012!

Quoting (in Portuguese) from one of many possible sources:

Regime Especial de Regularização Tributária (RERT III) - O RERT III é um regime excecional de regularização tributária, previsto na Lei do Orçamento do Estado de 2012 e regulamentado pela Portaria n.º 17-A/2012, de 19/01 para declaração de elementos patrimoniais não localizados em Portugal em 31/12/2010, cujos rendimentos correspondentes não tenham sido declarados à Autoridade Tributária, à semelhança do que sucedeu aquando do "Orçamento retificativo" de 2005 (RERT I) e da Lei do Orçamento de Estado para 2010 (RERT II).

Beneficiários: Pessoas singulares e pessoas coletivas que possuam elementos patrimoniais que não se encontravam em território português em 31/12/2010, e que consistam em depósitos, certificados de depósitos, partes de capital, valores mobiliários e outros instrumentos financeiros, incluindo apólices de seguros do ramo «Vida» ligados a fundos de investimento de capitalização do ramo «Vida».
 

This example includes a real amnesty in terms of forgiving past possible unpaid taxes, and no fines, nor criminal charges for those that followed the amnesty rules, and declared and paid a specified proportion of previously undeclared assets detained abroad (7.5%, in RERT III).
As such, in this case, an initial "declaration" fee was collected (a fee that otherwise would not be collected) and significant assets entered the taxation system, to pay ordinary taxes going forward (taxes that otherwise would not be collected in the future, since they will result from assets that without this amnesty would remain unknown by the tax authorities).

This second example, from 2012 (and note, from the citation above, that it followed similar amnesties in 2010 and 2015...), represents something that may be unfair for those previously paying all the legislated taxes, but that effectively adds both immediate and future tax income to the State.

The 2013 "fiscal pardon" merely anticipates tax income, at the cost of reduced tax income in the (near) future.
It was very successful, but it was merely another contortion to achieve a (short-term) delay in the final recognition of a dismal fact:  The Portuguese political rulers are not able to implement real deficit reduction.  In fact, they don't even desire that to happen, since they can't bear the thought of a reduction in the dimension and strength of the State.  All their efforts are focused on disguising the country realities, so that the Troika (now) and the markets (hopefully soon) will go on lending for a little while longer...

Bank evolution in Europe, with some focus on Portugal

Hi!
First post here!
Not that it is particularly important or inspiring, it is simply the first.
This one is related to the banking crisis that is slowly unfolding in some European countries, although disguised as well as possible (since every stakeholder has a lot to gain from trying to make things look good, instead of bad...).
Like many of the posts that will follow, it is based/inspired on something I read elsewhere.
In this case, the source is this article by John Mauldin, an author I appreciate very much.

Two points that deserve special attention on Mauldin's article are:

1) This chart, that illustrates the recent evolution of national debt owned by the banks of some key European countries:

 

This chart shows absolute values. As such, those values must be interpreted according to each countries' dimension.
The critical evolution of the Spanish and Italian cases is clear.
Portugal's evolution is also interesting. The country is being assisted by official international lenders (the "troika", that includes the IMF, the ECB, and the EU itself), because commercial lending to Portugal basically ended in 2011 (due to well justified concerns about the sustainability of the country's debt). During 2012 and 2013 Portugal was able to obtain some very limited funds in commercial syndicated debt placements. It seems clear that the source of those funds was almost purely internal...
The situation of the Portuguese banks is even funnier because most of the larger Portuguese banks are receiving support (funds that can be counted as part of their Tier 1 capital) from the Portuguese state, at the same time that they are lending growing amounts to that same state. All will be well until all goes burst. And when it happens it will be mutual assured destruction.
Will there still be (new?) official lenders of last resource to save the future national debacle? In face of much greater problems than hose of 2011 will the IMF decide to increase its lending, after the present round of financial support? Will The EU/Germany step in for a (further) rescue? Doubtful.

That leads us into:

2) This gem, found (ok, it was not really deeply hidden) and cited by Mauldin in the above linked article:

 

Carefully read, this is interesting in itself. But, to fully appreciate it, one needs contextual information about the evolution of non-performing debts in the "eurozone periphery" (a reality that the banking sector has been successful in disguising).
Here, again, Portugal seems to be a good example.
I will discuss it in future posts.