Tuesday, 19 March 2013

WW3 - PUTIN - CYPRUS


CYPRUS HAS 1 MILLION PEOPLE (AND SUNSHINE)
THE EUROPEAN UNION HAS 550 MILLION PEOPLE.
Update: 18 Dec 2014. The BBC News, current affairs programs and liberal UK newspapers - all, without fail - damn President Putin. They brand him a monster, a short sighted economic illiterate and a merciless invader; without the slightest evidence. Putin is not an angel; no president of Russia could be all sweetness and light. But neither are Bush, Obama, Cameron, Blair and all other world leaders. So, if there is no evidence behind the invective, slander, lies, misdirection, besmirching and obfuscation, then who is pushing (funding) the world-wide agenda to destroy this man's reputation and so bring about regime change? "They" have persuaded America and Europe to impose sanctions and the OPEC cartel to halve oil prices - to wreck the Russian economy. "They" are very, very determined to oust the most popular president - probably the most popular leader of all the OECD countries. I found a clue in an opposite scenario - Obama nuzzling up to Cuba - suddenly, after 50 years of hostility, his ever bestest friends in  the whole wide world. US TV interviewed two US politicians - both from immigrant Cuban families - presumably in opposition to Castro. These two, against the universal welcoming of healing the wounds, are furious. Clearly - they believe their families should be restored to whatever elevated positions and wealth they had in Cuba and the Castro family be shot. 

Who, I wonder, is in a similar relationship to Putin. I assume the White Russians, aristocrats who fled the Revolution, are long gone. It can only be the new aristocrats, the exiled oligarchs - the gangsters and cheats who bribed and beat their way into ownership of immense public assets as they were privatized by Putin's predecessors. So, that's my bet. This PR war on Putin is The Revenge of The Banished Off-shore Oiligarchs. And they have bought the ears and the pens of the West's media and politicos. 

Will it work? No. Russians do not cave in easily. They may swig more vodka, sing more mournful laments, wallow in masochism - but they won't retreat. What will happen is that Russia will make new friends - China, India and South America for example - and create a new world reserve currency. We, in the West, will lose a fortune. The Dollar will wobble ad may collapse. This global paper-war could have awful consequences. 

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ORIGINAL ARTICLE ON CYPRUS TAX 2013

It is ironic that President Vladimir Putin of Russia is complaining about a 10% or 12.5% tax on Cyprus deposits owned by Russians. The last great bank raid was in the Russian Revolution in 1917 when all bank account and deposit box owners had to attend their banks – to see ALL their assets confiscated by the new government. Compared to the national debts, the 1918 raid yielded remarkably little in cash and jewels, possibly due to capital flight.

My assumption about EU advisors is that they are intelligent. Therefore the proposed $6B tax, via the Cypriot Government on about $60B in bank accounts, will have been planned and the likely consequences mapped. There are about 1.1 million Cypriots, 80% Greek descent and 20% Turkish (though they are in fact a historic blend of the whole region – the cradle of civilisation). Cyprus and Greece have ancient links with Russia due to their shared religion – The Orthodox Christian Church.

The population numbers equate to about 380,000 households; there are 414,000 people of working age. If the $60 billion belonged to the locals each home would have saved $157,894 per family; a nice thought but improbable. An estimate on the WWW, assumes half the money belongs to locals and the rest to non-residents (tax-evaders). If correct it would mean $79,000 savings per family – which still looks high, after the societal chaos over the past 50 years. My guess is that about 1/3rd is local loot and the other 2/3rd or $40 billion is tax-evasion-capital-flight. Revenues from offshore financial services are alleged to have overtaken tourism – but I doubt the figures - as tax-haven locals rarely benefit much from servicing the ephemeral super-rich.

Cyprus, with Malta, has expanded as a safe haven for tax evasion – and Cyprus banks have burgeoned alongside their new industry. Profits tax is 10% - no wealth taxes – no other taxes – no questions - and no income tax on interest on foreign bank accounts.

I assume that much of the $40 billion fled from Greece – some has come from Russia – and the rest from Europe and the USA. Who knows exactly who has good title to the money and assets sitting in funny-money companies, trusts, charities and the rest of the quasi-legal confetti circus of false documentation – which ordinary taxpayers are asked to take seriously. And in this, I think, is the clue to the underlying strategy of risking an unprecedented new tax on savings.

To repatriate this $40 billion – if it were my appointed task, and if I were to change from tax poacher to gamekeeper to do it - I would locate the assets and issue “protective tax assessments” and impound the assets while Back-Duty-Tax-Cases were fought with each “owner” who appeared to claim them; a long and tedious legal process – with heavy costs – which would in most cases recoup 100% of the assets or cash; effective but not quick.

Some person or persons in Europe have looked at the complexity of applying tax laws and said “Sod that for a game of conkers” and gone for a rapid and immediate alternative. They have raided the banks – irrespective of arguments, lawyers, accountants, bookkeepers, bankrupt olive-grove owners, weeping starving orphans outside the courtrooms – in fact they have gone for the Russian Sequestration Tax Solution RSTS.  I believe most countries or tax-regions will follow Cyprus’s example.

Will it spook all tax-havens users? Undoubtedly. Will it cause a run on good, well regulated, stable European and USA banks? No, quite the reverse. The nervous evaders-diarrhoea will first unblock a rapid and fluid run from tax-haven to tax-haven and from dodgy bank to dodgy bank – hotly pursued, I suspect, by sudden and unexpected bank deposit taxes, levied for the benefit of tax-starved and fiscal-cliff nations large and small. With each hurried transborder transfer, owners will be flushed out – 10% here, 12.5% there, 15% in the wicked rogue states – until the fortunes evaporate. Then they will run for safe-havens, not tax-havens.

PRESIDENT VLADIMIR PUTIN
A GOOD CHESS PLAYER?
Following through my paranoid theme – I further suspect that in actuality, in reality, President Vladimir Putin is smiling broadly behind his hand, as his oligarchs reluctantly creep home from the world’s tax-havens – wiser, poorer and embracing Mother Russia; where they will invest their great wealth – and pay tax on the income.

My final suspicion is that both Putin and the EU officers play a good game of chess.

We live in interesting times.



I SAY AVOIDANCE - YOU SAY EVASION 

1 comment:

  1. Do you subscribe to any other websites about this? I'm struggling to find other reputable sources like yourself

    Amela
    Birmingham Safety Deposit Box

    ReplyDelete