Tuesday, 5 April 2016

Global Tax Lawyers Hit Mother Lode!

Baltic Dry Index. 471 +21        Brent Crude 37.57

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

Brexit odds checker. http://www.oddschecker.com/politics/british-politics/eu-referendum/referendum-on-eu-membership-result

Brexit Quote of the Day.
The world is governed by very different personages from what is imagined by those who are not behind the scenes.
Benjamin Disraeli. 
For more on the week’s top story, the global tax lawyers hitting the ultimate mother lode, scroll down to Crooks Corner. The bottom just fell out for many of the world’s one percenter’s. The Donald’s and Bernie’s presidential prospects just soared.

We open today with more on the war on cash.  Stay long fully paid up physical gold and silver. The public are now being “conditioned”  for a coming world without cash.
"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."

F. A. von Hayek

How negative interest rates could lead to a world without cash

Published: Apr 4, 2016 5:08 a.m. ET

Negative Thinking: Central bankers force acceptance of a monetary-policy revolution

Several of the world’s central banks have adopted negative interest rates. But why would investors go along? There are several possible reasons:

1. Security and safety: Government bonds or insured bank deposits are backed by the full faith and credit of a sovereign nation, which has the ability to issue currency to make repayments.

2. Returns are relative: In Europe, for example, purchasing bonds yielding more that the official rate at the central bank — even if it is negative — is the least worst alternative.

3. Speculation: Investors may be attracted by the opportunity for capital gains from price appreciation if they expect yields to become even more negative. Foreign investors also may be attracted by possible currency appreciation.

4. Real returns: Investors may favor real return over nominal return. Bonds with nominal low- or negative return may preserve or increase purchasing power in situations where the expected deflation is greater than the negative yield, providing positive real yield.

5. Investment mandate: Fund managers may be forced to purchase negative yielding bonds, irrespective of the fact that it locks in a loss.

6. Banks’ and insurers’ mandate:Financial institutions may be forced to purchase negative yielding securities, given liquidity regulations that require these entities to hold high-quality securities.

7. Central banks’ mandate: Central banks with restricted investment choices are also buyers of negative-yielding securities.

Read: Negative interest rates put the global economy on a razor’s edge

Coping strategies
Yet large and persistent negative interest rates would meet significant resistance, triggering alternative strategies to avoid losses.

To begin with, investors can withdraw cash and hold it. In the 1990s, low interest rates and concern about bank failures drove significant withdrawals of cash in Japan, creating something of a bull market for home safes.

Nowadays, Europe and Japan are seeing record purchases of safes, presumably designed to store cash and avoid the impact of negative rates.

Second, investors may avoid negative rates by resorting to a variety of near-cash instruments. For instance, businesses could take payment by bank checks that would not be deposited until the money was needed.

Third, investors could hold savings in foreign currencies, converting into a negative-yielding currency when needed. This strategy avoids negative yields but entails foreign-exchange risk, unless this can be effectively hedged.

Fourth, real assets such as land, property, commodities — especially precious metals and collectibles — would be favored. Businesses also could stockpile inventory.
And in Japan, our future, as an insane fiat money world heads deeper into voodoo economics and the ending of the Great Nixonian Error of fiat money, communist money, Corbynomic’s lite.

BOJ Negative Rates Risk Destroying Loan Market as Freeze Deepens

April 3, 2016 — 4:00 PM BST Updated on April 4, 2016 — 5:19 AM BST
The freeze in Tokyo’s market for overnight loans looks set to extend into a third month as the Bank of Japan’s negative rate policy makes it harder for brokers to price and process transactions.
Two months after the BOJ said it would start charging interest on some lenders’ reserves, the outstanding balance in the interbank call market tumbled to a record low 2.97 trillion yen ($27 billion) on March 31, according to Tanshi Kyokai data going back to 1988. While the brokers association and the Japan Securities Depository Center said two weeks ago they had upgraded systems to settle transactions at sub-zero yields, traders say more than technical issues are preventing a revival.

“Among central banks, the BOJ is the one that destroys functioning markets the most,” said Izuru Kato, the president of Totan Research Co. in Tokyo. “Companies will slash staff and scale back operations where activity is grinding to a halt, exposing markets to spikes in rates when the time comes for normalization.”

The disruption to Japan’s ground zero for bank funding coincides with a collapse in bond-market trading over the past year, even as the BOJ’s hoarding of notes has left it nowhere near achieving its 2 percent inflation target three years after Haruhiko Kuroda became governor. When questioned by a lawmaker in parliament last month, Kuroda agreed that it would be theoretically possible to lower rates to minus 0.5 percent, from the current minus 0.1 percent.

Lenders are cutting back their use of overnight borrowing as they assess how negative rates will impact earnings for the fiscal year that started Friday. Standard & Poor’s estimated in February that minus rates will erode the profitability of regional lenders by 15 percent and major banks by 8 percent.
In Brexit news, Project Fear and Smear is working. Under relentless attack from the massed ranks of Great Vampire Squids, central banksters, the LSE, IOD, American Generals, Barry Obama, and a whole host of petty EUSSR politicians and Eurorats, plus Dodgy Dave, John Bull is starting to buckle.

EU referendum: 'Project Fear' working as poll shows Remain taking a narrow lead

4 April 2016 • 9:50pm
David Cameron's campaign to warn voters about the dangers of leaving the European Union is beginning to win the argument ahead of the referendum, a Telegraph poll finds.

The exclusive poll finds that the “Remain” campaign now has a narrow lead after trailing last month, in a sign that Downing Street’s tactic – which has been described as “Project Fear” by its critics – is working.

Despite concerns that the steel crisis and the Brussels terror attacks could influence the referendum result, the poll finds that they have had little or no effect on how people intend to vote.

In an analysis of the ORB poll for this newspaper, Sir Lynton Crosby, who masterminded the Conservative Party’s general election victory, says that “the outcome of the referendum will hinge on which side can better turnout their supporters”.

The poll finds that 51 per cent of voters now support Remain – an increase of 4 per cent from last month. Leave’s support has decreased five points to 44 per cent

"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."

Murray N. Rothbard
At the Comex silver depositories Monday final figures were: Registered 32.91 Moz, Eligible 122.04 Moz, Total 154.95 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, more on the “Panama Papers.” Forget President Putin and his best buddies, he can more than take care of himself and all of them. But it’s the one percenter’s worst nightmare. Now comes years and years under the spotlight of the media and the combined global tax thieves. US and UK tax lawyers just hit the ultimate jackpot. The mother lode. The one percenter’s! For the lawyers, it’s like winning the lottery, week after week, after week. God must be a lawyer after all! Who knew?
Not to worry though for the one percenter’s, as Panama and a host of dodgy offshore island tax havens close, good old Uncle Scam is stepping in to fill the breach.
You've got a friend in me
You've got a friend in me
When the road looks rough ahead
And you're miles and miles from your nice warm bed
You just remember what your tax pal said
Boy you've got a friend in me
Yeah you've got a very expensive friend in me
With apologies.

‘Panama Papers’ Shine Uncomfortable Spotlight on Wealth of the Global Elite

April 4, 2016 — 8:19 PM BST Updated on April 4, 2016 — 9:12 PM BST
From Moscow to Reykjavik to Buenos Aires and beyond, the same two words are suddenly reverberating in financial circles: offshore accounts.

No sooner did a group of media outlets report Sunday that some of the world’s wealthiest people, including politicians and business figures, had channeled billions through offshore accounts than the inevitable blowback began.

Public officials responded with outrage, bluster, denials, semi-denials or all of the above. Banks like HSBC Plc and UBS Group AG stressed that they follow the rules and carefully vet customers. And regulators said what regulators often do: We’ll look into it.

In many ways the articles, published by the International Consortium of Investigative Journalists, simply confirmed what experts have long known: Wealthy people, prominent or not, often use offshore accounts -- and, in most cases, those accounts are perfectly legal.

Yet for political and business leaders, as well as their financial enablers, even legal offshore accounts can raise uncomfortable questions. Sunday’s reports, said to be based on 11.5 million leaked documents from a Panama law firm, have once again trained a spotlight on the offshore ecosystem used by a global elite who at times seem to operate beyond conventional borders. As yet, the full scope of the allegations is unclear.

To some, the Panama Papers, as the documents are being called, could represent the tip of the iceberg. The ICIJ said its cache of leaks outlined more than 200,000 shell companies. The Panama law firm at the center of the reports, Mossack Fonseca, has denied wrongdoing.

The law firm said in a statement to the ICIJ that it has “always complied with international protocols ... to assure as is reasonably possible, that the companies we incorporate are not being used for tax evasion, money laundering, terrorist finance or other illicit purposes.”

“One leak exposed a global web of over 200,000 offshore shell companies: Imagine what leaks at other well-placed law firms and banks would expose?” Mark Williams, a lecturer at Boston University and author of “Uncontrolled Risk,” a book on the rise and fall of Lehman Brothers Holdings Inc., said in an e-mail.

5 things to know about the Panama Papers

Published: Apr 3, 2016 11:12 p.m. ET
A massive data leak of files from Panama-based law firm Mossack Fonseca went online Sunday, in a collaboration by the German newspaper Suddeutsche Zeitung and the International Consortium of Investigative Journalists and more than 100 news outlets in 80 countries, exposing how the world’s ultra-rich manage their offshore accounts.
---- 3. Who should be worried?
The world’s “1 percenters.” The BBC reported 72 current and former heads of state are linked to the firm, including Russian President Vladimir Putin, as well as celebrities, business leaders and other public officials. Iceland’s Prime Minister Sigmundur Davîo Gunnlaugsson is already facing calls to resign after documents revealed he opened a shell company to allegedly hide money in the British Virgin Islands.

---- “I think the leak will prove to be probably the biggest blow the offshore world has ever taken because of the extent of the documents,” ICIJ director Gerard Ryle told the BBC.

4. Did everyone involved break the law?
Not necessarily. Keeping money in offshore accounts can be perfectly legal, and the practice can be preferable in some countries to keep the funds protected from criminals or taxes. However, it’s also a favored method of criminals to launder money and corrupt politicians to hide funds.

5. What’s next?
Criminal investigations are sure to follow in dozens of countries, and more revelations are sure to emerge as the documents are pored over more thoroughly. As of yet, no U.S. politicians have been named, but as this tweet suggests, that may soon change:

Here are the famous politicos in ‘the Wikileaks of the mega-rich’

Fusion Investigative UnitDirty little secrets  April 3, 2016 6:59 p.m.
It’s being called the “Panama Papers” — a trove of 11.5 million leaked internal documents from the Panamanian law firm Mossack Fonseca, showing how hundreds of thousands of people with money to hide used anonymous shell corporations across the world. Fusion’s investigative unit was one of the more than 100 media organizations that dove into the files — and found drug dealers, arms traders, human traffickers, fraudsters. We also found no shortage of politicians or their family members.

Here is a listing of current and former world leaders connected to the files. Check out Dirty Little Secrets, Fusion’s full investigation into the leak and the underworld it exposes.

For additional information on these names and more, read “The Power Players,” an interactive presentation by the International Consortium of Investigative Journalists (ICIJ), from which much of this information is gleaned.
President of Argentina
Macri — who as president has vowed to fight corruption — is listed, with his Italian tycoon father Francisco and brother Mariano, as a director of Fleg Trading Ltd., incorporated in the Bahamas in 1998 and dissolved in January 2009 — a financial connection Macri didn’t disclose on asset declarations when he was mayor of Buenos Aires. His spokesman said didn’t list Fleg Trading Ltd. as an asset because he had no capital participation in the company. The company, used to participate in interests in Brazil, was related to the family business group. “This is why Maricio Macri was occasionally its director,” he said, reiterating that Macri was not a shareholder.
Former Iraqi PM
A wealthy Iraqi exile who helped lead the push for war with Saddam Hussein, Allawi returned to Iraq to serve as prime minister in 2004. He also served as vice president s recently as last year. From 1985 to 2013, Mossack Fonseca helped run his Panama-registered company I.M.F. Holdings Inc. I.M.F. owned a house in Kingston upon Thames, England worth roughly $1.5 million, and another offshore company of his, Moonlight Estates Ltd., held a property in London. Representatives for Allawi confirmed that he “is the sole director and shareholder of Foxwood Estates Limited, Moonlight Estates Limited and IMF Holdings Inc.,” adding that he ran many of his house purchases through anonymous offshores “in light of an assassination attempt on him.” Indeed, he survived an attempt on his life in 1978, presumably by Saddam Hussein.
PM of Iceland
A radio personality who led the Progressive Party to victory after the financial crisis of 2008, Gunnlaugsson and his wealthy wife owned a British Virgin Islands shell company called Wintris Inc., that held nearly $4 million in bonds in Iceland’s three major banks. He failed to declare his ownership of Wintris on entering the Parliament in 2009. In March, a TV interviewer asked Gunnlaugsson if he had ever owned an offshore company. “Myself? No,” he said, adding: “Well, the Icelandic companies I have worked with had connections with offshore companies.” A spokesman told the ICIJ that Gunnlaugsson and his family had followed all Icelandic laws.
King of Saudi Arabia
Through a series of British Virgin Islands shell companies, the Saudi king appears to have taken out several luxury mortgages for houses in London — at least $34 million worth — and held “a luxury yacht the length of a football field.” The king did not answer the ICIJ’s requests for comment.
President of Ukraine
Known as Ukraine’s billionaire “chocoloate king,” Poroshenko swept into office in 2014 vowing reforms that have not yet come. He became the sole shareholder of Prime Asset Partners Limited in 2014, as Russian troops invaded Eastern Ukraine. The following year, Poroshenko vowed to sell most of his assets; news reports said they ultimately ended up in “Prime Asset Capital.” His spokesman told the ICIJ said that “creation of the trust and related corporate structures had no relation to political and military events in Ukraine,” adding that his assets held by an independently managed fund — Prime Asset Capital.

Mossack Fonseca: The Nazi, CIA And Nevada Connections... And Why It's Now Rothschild's Turn

Tyler Durden
---- Why is Nevada important? Because recall that according to a recent investigation by Bloomberg, "The World’s Favorite New Tax Haven Is the United States" ...
.. and specifically several US states such as Nevada, Wyoming and South Dakota.
After years of lambasting other countries for helping rich Americans hide their money offshore, the U.S. is emerging as a leading tax and secrecy haven for rich foreigners. By resisting new global disclosure standards, the U.S. is creating a hot new market, becoming the go-to place to stash foreign wealth. Everyone from London lawyers to Swiss trust companies is getting in on the act, helping the world’s rich move accounts from places like the Bahamas and the British Virgin Islands to Nevada, Wyoming, and South Dakota.

How ironic—no, how perverse—that the USA, which has been so sanctimonious in its condemnation of Swiss banks, has become the banking secrecy jurisdiction du jour,” wrote Peter A. Cotorceanu, a lawyer at Anaford AG, a Zurich law firm, in a recent legal journal. “That ‘giant sucking sound’ you hear? It is the sound of money rushing to the USA.”
That money is rushing for one simple reason: dirty foreign - and local - money is welcome in the U.S., no questions asked, to be shielded by the most impenetrable tax secrecy available anywhere on the planet.
One may even say that nowadays, US-based tax havens are the new Switzerland, or Bahamas or, for that matter, Panama. Indeed, for most Americans, offshore tax haven are now meaningless with the passage of the FATCA law, which makes the parking of dirty US money abroad practically impossible. So where does that money go instead - it stays in the US:
Others are also jumping in: Geneva-based Cisa Trust Co. SA, which advises wealthy Latin Americans, is applying to open in Pierre, S.D., to “serve the needs of our foreign clients,” said John J. Ryan Jr., Cisa’s president.
Trident Trust Co., one of the world’s biggest providers of offshore trusts, moved dozens of accounts out of Switzerland, Grand Cayman, and other locales and into Sioux Falls, S.D., in December, ahead of a Jan. 1 disclosure deadline. 
Cayman was slammed in December, closing things that people were withdrawing,” said Alice Rokahr, the president of Trident in South Dakota, one of several states promoting low taxes and confidentiality in their trust laws. “I was surprised at how many were coming across that were formerly Swiss bank accounts, but they want out of Switzerland.”
And, to top it off, there is one specific firm which is spearheading the conversion of the U.S. into Panama: Rothschild.
Rothschild, the centuries-old European financial institution, has opened a trust company in Reno, Nev., a few blocks from the Harrah’s and Eldorado casinos. It is now moving the fortunes of wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt.
 * * *
 For financial advisers, the current state of play is simply a good business opportunity. In a draft of his San Francisco presentation, Rothschild’s Penney wrote that the U.S. “is effectively the biggest tax haven in the world.” The U.S., he added in language later excised from his prepared remarks, lacks “the resources to enforce foreign tax laws and has little appetite to do so.”

“Anybody has the right to evade taxes if he can get away with it. No citizen has a moral obligation to assist in maintaining the government."

J. P. Morgan.

Brexit Quote of the week.
Cameron: The gods too are fond of a joke.

With apologies to Aristotle

Solar  & Related Update.

With events happening fast in the development of solar power and graphene, I’ve added this new section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

The laptop turns 35

Dario Borghino April 4, 2016
April 3, 1981 marked the introduction of the Osborne 1, the first mass-produced laptop computer. Three-and-a-half decades later, laptops are now much more portable – but how do they compare to the deeper vision that sparked them, and what lays ahead? Gizmag talks with Dr. Alan Kay, the personal computing visionary who came up with the notion of a notebook computer, and Lee Felsenstein, designer of the first commercially available laptop, to get their views.

Dr. Alan Kay is a pioneer of personal computing and one of the most influential thinkers in the industry – some of his quotes include the Steve Jobs favorite, "People who are really serious about software should make their own hardware," and "the best way to predict the future is to invent it."

In 1968, then a doctoral student at the University of Utah College of Engineering, Kay was introduced to the innovative way in which the LOGO programming language was being taught to children at a Massachusetts private school. To him, this was the realization of the words of JCR Licklider, a psychologist at ARPA, who had posited that "it is the destiny of computers to become interactive intellectual amplifiers for all people pervasively networked worldwide." (In the early 60s, computer interactivity was very much a new concept.)

On the flight back from his visit, pondering how the classroom experience he had just witnessed could be embodied in an electronic device, Kay quickly concluded that children should not be tied down to a desk. Remembering a 16-by-16 pixel flatscreen display prototype he'd seen earlier that year, he developed the idea of fitting transistors on the back of a notebook-sized display to create a "notebook computer."

Two years later he joined Xerox Corporation's Palo Alto Research Center (PARC), where he was a key figure in the development of graphical user interfaces and object oriented programming, among numerous other things. In 1972, while at Xerox, he drew on his earlier ideas to write a proposal for "Dynabook" – a wireless, highly interactive portable computer that would help children learn, create, and think for themselves.

We asked Dr. Kay about the ideas surrounding the Dynabook concept, including some of the alternative form factors that were being considered at the time.

"In the late 60s, I had the privilege of helping a bit on Ivan Sutherland's first VR system," Kay tells us. "This was a natural future form for a Dynabook (the electronics would be in one's pocket, the displays would be on chips). This is a real destination today, especially given that it supplies wide angle vision in a way that is difficult for a tablet.

"The other main idea that was starting to happen around that time, and especially in the early 70s, was Nicholas Negroponte's ideas about 'the computer as your environment' embedded everywhere in the world. You would only have to carry a small piece of electronics that would tell the system who you were and where you were pointing (Nicholas thought of it as being part of a wrist watch). This is happening more and more today, and Nicholas' research group produced some very compelling demos [video] in the late 70s and early 80s."

----Kay's ideas soon inspired the Xerox NoteTaker, a 1978 prototype developed at PARC meant to showcase the best possible implementation of the Dynabook with the technology available at the time. The NoteTaker featured a then-impressive 256 KB of memory, but also weighed in at a not-too-portable 48 lb (22 kg) and never got past the prototype stage.

But on April 3rd, 1981, something did: the Osborne 1. Named after Osborne Computer Corporation founder Adam Osborne, this was the first commercially available personal computer and was designed by computer engineer and Homebrew Computer Club moderator Lee Felsenstein.

----The first truly portable laptop that users could easily carry rather than risk throwing their back out lugging around was 1982's GRiD Compass 1101. The Compass was the first to adopt the "clamshell design" with the screen folding over the keyboard and sported an impressive 320x200 pixel display, but it also came with a premium pricetag of US$8,000 -10,000.

The monthly Coppock Indicators finished March

DJIA: 17685.09 -18 Down. NASDAQ:  4869.85 +33 Down. SP500: 2059.74 -22 Down. 

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