Why Not Stop Taxation Altogether? Just End It!

Anticipated Reaction To Ending Taxation

It occurred to me that with so many people thinking that deficit government spending helps drive the economy at some point our leaders might want to give us taxpayers a break. Why Not Stop Taxation Altogether? Just End It! Such a policy would go a long way to diminish the divide polarizing our nation. I do not know anyone who likes to pay taxes or go through hours and hours of record keeping and filling out forms in order to comply with our complex tax system.

Over the years Washington and governments in many countries have shown little in the way of financial restraint. If deficits don't matter it seems logical that spreading the wealth around by something other than policies focused on redistribution through such a complicated system has merit. Both economists and politicians have considered many over the top solutions to resolve the problem of slow economic growth in a global economy mired in debt. In the past, cutting taxes has been a favorite method to spur consumer spending and pump up growth. The suggestion of placing taxation in the dustbin of history is merely an extension of this idea.

No Taxation Means More Money For Everyone!

If indeed cutting the ties binding us to responsible budgets is the solution to our economic woes and holds the key to prosperity being timid may not have served us well. Forget all the previously considered outlandish ideas, such as a war on cash, forgiving debt through a debt jubilee, giving everyone a guaranteed income, and even injecting money into the economic system by dropping it from a helicopter. Ending taxation in many ways can be seen as having the same effect of economic stimulation.

This is only one in a series of  easy plans to jump-start the economy, the next part when I get around to writing it will be titled, "Just Print More Money." Both plans constitute a better alternative than going to war to kill off excess labor while ramping up production of self-exploding equipment or building bridges to nowhere. If history is any indication wealth and jobs flow into any country that has low tax rates so why not take it to the next level. While I could parade slew of complex figures and calculations before you proving all this will work please just show me the same kind of trust we give to those leading us from Washington.

My proposal should make everyone happy, it should please both Trump voters who claim enough is enough as well as Hillary supporters who can't get enough. So I say, eat your heart out Paul Krugman and you too Ben Bernanke, with all the time both of you have spent pondering the economy in the ivory halls of academia you have come close but it is I who have proposed the next step in our financial evolution.  Ending all taxation of any kind will not render the laws of economics moot or move us much further into the false state of modern voodoo economics than we have already traveled and it is guaranteed to work until it no longer does.


Footnote;  Your comments are welcome and encouraged. If you have time check out the archives for post that may be of interest to you. Below is another post related to this subject,
                   http://brucewilds.blogspot.com/2014/04/planning-sustainable-future-for-mankind.html

China, Real Reform Or Just Spinning Its Wheels?

China Continues Expanding Liquidity

Recently China has been on a tear to add liquidity to its flagging financial system. Liquidity should by all rights stem its economic descent, however, China's central bank is in the unenviable position of filling a leaky bucket. While they have made every effort to plug the leaks and halt the flow of money across its borders it is finding just how porous the financial dikes around modern day economies has become. We have witnessed massive monthly outflows of wealth and capital that have continued to flee China even after efforts to plug the fractures and cracks. Cross-border money flows is a strong and important force that disrupts markets and effects the ability of central banks to isolate and control problems within their borders.

Chinese Money Is Distorting Markets

Well documented is how money flowing out of China has affected housing prices in Vancouver and driven them into bubble territory. It is estimated that $700 billion to $1 trillion have fled China last year. This sum is more than the entire economy of Switzerland. China now claims the cross-border capital flows are expected to stabilize in the fourth quarter and major capital flight is unlikely because the country's economic fundamentals are strong. On Friday the nation's foreign exchange regulator claimed. Official data released on Wednesday showed overall economic growth at 6.7 percent, with some signs of strength  appearing in the industrial sectors.

More important to many China watchers than what is said or government numbers is that on Friday, the People's Bank of China (PBoC) set the central parity rate at 6.7558 hitting a six-year low. They claim depreciation of the yuan is natural in light of the recent strengthening of the U.S. dollar, noting that the dollar index, which is the trade-weighted value of the dollar against a basket of major currencies, rose by 2.99 percent since the beginning of the month. The dollar has strengthened mainly due to the rising expectation of an interest rate hike by the United States Federal Reserve by year's end.

All in all the events unfolding are directly responsible and feeding into several trends. One noticeable trend is that Chinese companies are expanding investment in overseas acquisitions, this is a way to move money out of the country while not upsetting the apple-cart. Also, China has embarked on an unprecedented spending spree, rebuilding the infrastructure both in China and across the world. Another area where money continues to flow is into housing. New home prices in 63 out of 70 cities that the National Bureau of Statistics monitors gained in September. This has raised enough concern to caused the central bank, the China Banking Regulatory Commission and other bodies to draft new rules barring developers, peer-to-peer networks, and other non-banks from offering down-payment loans to people buying houses.

By the end of September, financial institutions in China had lent 25.33 trillion yuan ($3.74 trillion) to the property sector, up 25.2 percent year on year, according to a report from the People's Bank of China. It is important to note housing prices are again on the rise in China as if they were not high enough. Indications that China’s hundreds of P2P lenders allowing home buyers to seek down-payment loans online are a sign of shadow-banking leverage creeping into China’s housing market and similar to what drove the margin financing that fueled last year’s stock market bubble. Concerns of a damaging housing crisis like the 2008 subprime mortgage crisis in the U.S. are very real.

Chinese Ghost Town built in Angola, Africa

The so-called re-balancing of the Chinese economy is multi-pronged and not free of risk. As they try to diversify away from exports toward a consumer economy and shift from domestic investment toward international investment we may see inexperience and greed take a backseat to good sense. Much of this is taking place at an astonishing speed. Not only is China building infrastructure projects for near neighbors such as a mega-pipeline project in Russia for natural gas and making plans to help refurbish Europe’s aging infrastructure. They are also doing work in nations throughout Latin America and Africa. Like the Chinese ghost town built on the outskirts of Angola's capital city, in the end, many of these may turn out to be nothing more than glorious bridges to nowhere.

The Bank for International Settlements says much of the capital outflow from China has been to pay down dollar debt and is largely benign and indicated foreign reserve depletion has subsided. Still, a debate rages on as to whether the Chinese economy really bottomed in mid-2015 and has been slowly recovering. It remains clear even with the banks already holding a lot of bad debt we are again seeing credit growing at unhealthy double-digit rates. The Communist Party may have put off the day of reckoning by pulling the levers of stimulus but when that moment comes it will be even harder to deal with as  trade tensions continue to grow.


Footnote;  As always comments are welcomed and please feel free to scan the archives for other article that may interest you. Above I mentioned an earlier post that explored the rather strange customs and how houses are sold in China, the link to that post can be found below.
http://brucewilds.blogspot.com/2017/10/china-housing-market-customs-bizarre-to.html

Trumps Reluctance To Accept Defeat

Are the political polls so far off that they do not reflect reality? With so many blatant lies in the air, what are the American people to believe? Trump's reluctance to accept what is generally called the "election results" if they come in against him has some justification and merit. We should expect no less from this Washington outsider shunned by many of those within his own party. Considering the contentiousness of this contest coupled with the media bias and a White House hell-bent on swaying the election results the idea Trump is somewhat dubious of the establishment is understandable. One thing is clear and that is Trump is a fighter and not a man who goes quietly into the night. Trump has shown the spine to stand up to Washington and galvanized the angst that has bubbled up through the electorate.

Even Springfield Occasionally Shows A Spine

America was formed by people speaking up and letting their voices be heard, this tradition should not be squelched. Many of us cite Al Gore's challenge following the 2000 election as an example of our right, no our obligation. to question the results of an election when the outcome is razor close or fraud is suspected. Not only is it our right it is our duty. When it is a case of handing over the reigns of leadership to someone in the same party that is currently in power, even more, diligence is in order, especially when evidence of collusion exist.

The facade of legitimacy surrounding Hillary Clinton is beginning to crumble as more and more leaks continue to drip out exposing her for what she is. To those supporting her who claim the source of this information is more important than what it reveals, I say not. As to claims made by Hillary during the third debate and many times before and after, that it was the work of the Russians, the National review has come out and said "No, Hillary, seventeen US intelligence agencies did not say Russia hacked Dem e-mails" pointing to the fact that just saying something does not make it true. Like in many highly contested and fiercely heated elections conspiracy theories, spoofs, false stories and scams fill the airwaves making the truth difficult to find.

Of the myths that have crashed to the ground are those that the media is fair and Washington is for and by the people. When it comes to giving tit for tat the media does not even come close in treating Trump the way it has treated Democrats. An example is how Vice President Biden's comment yesterday, “The press always ask me don’t I wish I were debating him? No, I wish we were in high school I could take him behind the gym — that’s what I wish,” were not taken as promoting or condoning violence but instead hailed as a statement of standing up for those who could not defend themselves. The media did not call this controversial nor did comments by Hillary taking about the "basket of deplorables" that support Trump have the affect that cost Romney the last election when he stated that 47% of Americans would never vote for him. 

While many people feel Donald Trump is an asshole, which is defined in the dictionary as a "stupid, incompetent, or detestable person" it must be noted many of us see his detractors as a bit bias and even if it proves to be true, he is our asshole. While Trump is flawed he has not draped himself in the guise of a public servant and fleeced the people for which he served of their trust and wealth. He does not stand before us as a symbol of corruption, he is not guilty of the same kind of lies and broken laws that would have put the average American in prison. So to those who say not pledging to accept defeat is both dangerous and further proof that Trump is unfit I say, methinks you doth protest too much.

White House Propaganda Machine Set On High!

Biden proved he is the "quintessential" politician during an interview on Meet the Press yesterday. Do not get me wrong this is not necessarily a good thing but he did show that if he had been rejected as a politician he would have excelled in a career as a snake oil salesman. Biden came across as both polished and proper while displaying a solid ability to empathize with the average American working hard to put bread and butter on the table. Looking at Biden spewing out his well-scripted answers it is little wonder that people across the world hold politicians in such low esteem.

Biden All Polished And Proper

Biden is another facet of the White House propaganda machine that has been cranked up to full speed in an effort to make Hillary Clinton the next President. Blame for the negative information about Hillary focused again on the source rather than on the damaging revelations revealed. Washington insiders supporting Clinton have blamed the Russians for hacking into Democratic computers and trying to interfere with the election in an effort to help Trump and discredit Hillary.

Little time was spent on what has come out in the way of leaked E-mails, however, some of the questions and attempts to discount the validity of the information made it clear media bias is well and thriving. This was in sharp contrast to how every and any allegation thrown at Trump has been instantly accepted as true. The theatrics of this  forced me to question the definition of "is" while I struggled to understand how we as a country ever got to such a place.

Michelle, "It has shaken me to my core"

This dovetails well with a great deal of coverage First lady Michelle Obama received after what has been called a rousing speech hammering Donald Trump for vulgar comments he has made about women. Campaigning for Hillary Clinton in New Hampshire, Obama also addressed new allegations that Trump inappropriately touched women. "It has shaken me to my core in a way that I couldn't have predicted," Obama said about Trump's comments, including those made in a 2005 video that surfaced late last week.

In covering events of the WikiLeaks about what would constitute criminal action and corruption on the part of Clinton over the awarding of contracts in Haiti were quickly discounted. The media seemed to be ignoring and oblivious to the avalanche of substantiated  claims against Hillary, the Clinton Foundation and a slew of their cronies, serious claims where a "public servant" violated both the power of their office and public trust. These are criminal offenses that go far beyond anything Trump is alleged to have done.

The net result of all this is that any viewer seeking real news may find their head left spinning. Indeed no stone has been left unturned when it comes to enabling those in the Clinton camp to justify her actions while Trump supporters faced awkward and thorny questions. This extended into the subject of treason in regard to his statements the election is "rigged" and whether Trump would support the results of the election if and when Hillary wins. One thing is certain and that is more than one group is throwing poison in the well and after the election, a price will be paid.

Is it time to bury your wealth then bury the shovel?

For those of us who have felt the market has been disconnecting from the real economy the events as of late make it appear the market is jacked up, so distorted and whacked it can go no further before melting down. Every day new articles surface declaring how it is different this time and how the Dow will soon hit 20,000 or may even soar to 50,000 while often, adjacent articles detail that Macy's has reported how it will be closing 100 stores. Another huge concern should be just how much of what we see is the result of a big boost in spending by the Federal Government. History shows economy pumping before an election is not an uncommon practice and nothing trumps the games we have witnessed played during this election.

Is It Coming To This?

All this may leave investors wondering if it is it time to bury your wealth then bury the shovel? This reference, of course, has to do with hiding or putting something in a place where no evidence of it exist. In regard to wealth, I'm talking about safety whether it be from falling markets or seizure. Many ways exist to  confiscate our wealth such as massive taxation, bank "bail-ins" or changes in currency valuation that result in inflation. Sadly, while determining where to best put your assets is not easy it is perfectly clear that with or without your voluntary participation the game will go on and economic readjustments will take place.

We must face the question of where exactly is a good place to dig, or in other words, where is the best place to hide or squirrel away what they have worked so hard to save. Savers who have been hurt by low-interest rates will be the first to testify to the pain they have had to endure during recent years. Since we do not have the ability or power to simply freeze in place the value of what we own in relationship to other assets we should at least try to minimize harm to ourselves by avoiding economic black holes. Many of these are akin to what is generally known as a "Ponzi scheme" and they exist everywhere, just because they hide behind a solid sounding moniker designed to conjure up images of stability should not fool us into thinking the promises they make will be fulfilled even when they are guaranteed.

Correctly predicting the form a future crisis might take and your preparations prior to it are particularly important in determining how you might fare economically at a time others are brutalized. Another key issue is how best and broadly you might want to hedge your bets, my personal history has shown that diversification often fails to meet expectations, while it is a great concept it does not always save your wealth. How diversified and into what areas you shift your savings, however, is the most important decision you can make when it comes to capital preservation.

The fact that certain asset classes will wildly outperform others is defiantly an issue and so is the matter of inflation.  I continue to contend that a primary reason that inflation has not raised its ugly head or become a major economic issue is because we are pouring such a large  percentage of wealth into intangible products or goods. If faith is lost in these intangible "promises" and money begins flowing into tangible goods seeking a safe haven inflation will soar. It should be noted that during times of inflation the effect on values is not even across sectors. In times of massive flooding a large rubber raft is quite valuable, but in times of drought not so much. The sad reality is there is no place to hide when it comes to avoiding how different assets react and change in value depending on supply and demand.

Years ago the common wisdom is that if you saved enough money you would be able to live comfortably off the interest in later years, currently that scenario appears to have vanished. Today a person holding a half million dollar savings account receives a paltry twenty-five hundred dollars in interest compared to ten times that before the 2008 financial crisis. To those of us who feel the world economy is a house of cards teetering on the edge of an abyss it is only a matter of time before a major reset begins that realign asset values to reflect the reality of today, this does not necessarily mean restoring them to historic norms. When this occurs those trapped in the wrong investments will pay a heavy price.

Because people often want to know if you are eating your own cooking I will tell you now, the answer is yes. A few of my favored investments fall into the category of paid for real estate, the real gems being those that are leased and returning a solid cash flow. I think bulk silver coins that can be purchased at a coin store for their silver content are also interesting over the long term, I also have a strange affinity for pennies, old copper ones are greatly preferred. I love collectibles bought on the cheap, they seem available everywhere these days as Americans often desperate for cash rid themselves of clutter. I find people will often gladly take a few dollars for high-quality items their parents bought. What I don't like is the ever growing number of paper promises like stock, annuities, and money put into a system dependent on computer kept records. 

For example, a real Black Swan event not taken seriously enough would be a devastating cyber-attack on America's power grid. This is not only possible but more likely than most people realize.  As both a country and as a culture we are shockingly unprepared for such an occurrence and one lasting for an extended time would leave many financial instruments in shambles. While the media paints both the financial system and our economy with a broad brush accepting and even promoting the idea those in power have control over what they have created remember just because someone says something does not mean it is true. An honest evaluation shows that many of the economic options and strategies open to the financial elite are unavailable to the masses or come only in some costly stripped-down form. I'm not advocating that people panic but it would be wise to remain cautious, plan ahead, and have at least some assets tucked away in a safe place.

Short Sale Rule Change Red Flag Warning Of Trouble!

Just how worried are those currently in charge when it comes to the stock market? If the E-mail I received this morning is any indication I would say very! Shorts play a very valuable role in keeping markets honest and by changing the rules to make shorting a stock more expensive or difficult a barrier to market price discovery is removed. When you add this to recent rumblings by Janet Yellen that the Federal Reserve might at some time consider buying stocks I see a red flag waving right in front of my face and it screams danger ahead.

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Dear Client,

Effective 10/19/2016 , Scottrade will begin assessing short sale fees to your account.

Short sale fees represent the market cost of borrowing shares from external counter-parties or from internal inventory to facilitate a short sale position, and may be applicable when you sell a security short or when an option transaction results in a short position. The amount of the fee is based on the supply and demand for the security and may change over the duration of the short position, sometimes on a daily basis. Short sale fees will begin to accrue upon settlement of the short sale and will cease upon settlement of the covering purchase. The short sale fee will be assessed to your account on a daily basis and will be reflected in your account activity as “Short Sale Fee.” All short positions may be subject to a buy-in at any time, including, but not limited to, if Scottrade is unable to borrow shares to keep your short position open.

A review of your account activity indicates you will be assessed this fee should you maintain your short position after the effective date listed above. This provides one calendar week to close your short position(s) with no charges assessed to your account. Please contact us at 800.619.7283 if you have any questions about short sale fees.

Sincerely,

Scottrade, Inc.

              

Please do not reply to this message – contact your local Scottrade team for assistance. Brokerage products and services offered by Scottrade, Inc. - Member FINRA/SIPC.

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 It should be noted that this is not the first time governments and those in power have altered the rules to support a market, we have seen it done many times before and in many countries. In this case, I would like to suggest however, the small trader will be the player most affected and shoved out of this market. As you know this means that as shorts leave or flee the market they have to buy stock to cover their position. This means an influx of buyers to drive an already high market even higher. A degree of suspicion might be in order, if not it will in the least make bears a bit more apprehensive.


Footnote; It is Friday afternoon and the markets just closed,  a Scottrade rep just called to inform me this fee was only on my short Tesla positions. He did not know if other companies are also doing this but it is likely they are. This makes it no big deal, however, it is an example of how rules can be changed in the blink of an eye.

Hypocrisy In America Reaches New Heights!

BREAKING NEWS: Today, Hypocrisy In America Has Reaches New Heights!

America Shocked-Reaction Caught On Tape

Trump said some stuff many of us hear every day so the reaction of horror and shock is a bit over the top. In a sane world, voters would be showing a little more interest in what issues are really important going forward. The Washington establishment and the crony capitalist who have made it their life raping and plundering the country for their own gain are giddy over the idea voters can so easily be distracted from the big picture. By shining the spotlight on Trump's flaws, that we knew existed all along, they seek to avoid being rejected and cast into the street.

Unfortunately, highlighting Trump's flaws do little to make a lying opportunist like Hillary Clinton easier to stomach. We can blame our poorly crafted primary process and the flawed system by which we choose our political leaders for much of this. To those of us who have grown cynical the timing of this release is also suspect. It is indeed very fortunate it comes just as a huge new batch of information is released about Hillary's speech transcripts and how and what she told bankers and Wall Street insiders conflicts with her public and election campaign persona. Trump is Trump, what is harder to define is the core beliefs of Clinton and who she will represent if elected.  

Like him or loathe him it has become clear Trump is not a part of the political elite and as a populist figure railing against the establishment, he has not been constrained by political correctness. Call what he said "locker room talk" or the words of an alpha male boasting, the words may not have been nice but the fact is most voters never viewed him as a choir boy.  Trump is the head of a political movement more than he is a product of the Republican party and he now heads a movement or shall we say, a popular uprising against failed politics and policies. The over touted benefits of globalization are now being questioned on a global scale and he has become a voice of the opposition. 

In regard to his "trashy trailer talk," it is said that people who live in glass houses should not throw stones. Today the sound of glass breaking and falling to the floor can be heard all across America. The sweet voices of innocent women mouth's agape declaring, "why I never" and men standing tall and denouncing Trump. It is both amusing and amazing to see so many saints and so few sinners in a land where lies are spun like cotton candy and our window to the world is a television screen where "sex sells" and violence is as common as sand in an hourglass. Below for your inspection, I submit a few of the reactions from well-known stone throwers as well as some over the top more outrageous comments that may "protest too much," no further comment is necessary.

 

                                        Arnold Schwarzenegger - who had a love child with his maid - reveals he will NOT vote for Donald Trump in the presidential election following … · 23h

Arnold Schwarzenegger has joined the growing list of prominent Republicans who are …

Daily Mail

Clinton surrogates portray Trump’s lewd comments as fitting broad pattern of behavior

Washington Post · 53 minutes ago

Hillary Clinton’s running mate and senior campaign aides sought to portray lewd comments by Donald Trump about women as part of a broader …

 Sen. Kelly Ayotte (R-N.H.), who is locked in a tough re-election race, announced Saturday that she will "not be voting for Donald Trump or Hillary Clinton and instead will be writing in Governor [Mike] Pence on Election Day."

 Carly Fiorina, who faced off with Trump several times during the GOP presidential primary and was later picked to be Ted Cruz's running mate, said Trump should step aside so that he could make way for Pence, Trump's running mate.

This latest revelation about Trump is a real setback to the four branches of our military. They've been fighting the sexual assault problem tooth and nail for years. This is truly heartbreaking. That said, the RNC did a bang-up job of selecting the candidate that best represents the GOP. Trump is the predatory poster boy; he covers the bases - both a sexual and an economic predator.

Donald Trump is a deplorable and filthy old man who has no shame.

 Trump has so much to offer! A pu$$y in every pot; or while snorting coke; or while tweeting at 3 am in the morning?

The GOP has officially endorsed a racist and justified it somehow. It looks like the current avalanche is for their own good because a lot of burden has been taken off them. They can now start plotting on how to purge the party of the deplorable alternate-right Trumpsters before they end up groping and molesting more GOP women.