Saturday, March 28th12.1°C
Economics Made Easy

Have a heart

Last week I walked by the Have a Heart Radiothon in the Orchard Park Mall. The goal of the radiothon was to raise funds for the pediatric ward at the Kelowna Hospital. Tears filled my eyes as I listened to the heart wrenching stories. At the same time my spirit was elevated as I witnessed over taxed citizens and businesses charge forward to give whatever money they could afford. If you ever doubt the extent of human compassion, you will regain your faith in humanity if you witness one of these telethons or radiothons. It is a true testament to our ability to care for each other as the radiothon raised almost $85,000. Congratulations to everyone involved!

Not long after leaving the radiothon I found my mood suddenly shifted to one of pure rage. Why, you ask? Well, the news reporter on the radio stated that our federal government had spent $122 million of tax payer dollars on bombing Iraq. $122 million in the last six months! Now I live by a general rule that has served me well over the years, and that is to never believe anything the government tells me. Nothing! So when the government tells me they have spent $122 million killing Iraqis, I believe the real number is much larger than this. But for argument sake let’s assume this figure is accurate. Consider how much good could have come from spending $122 million on the pediatric ward at K.G.H., or having divided those funds amongst several pediatric wards. Just pause for a moment and actually think about that. Some would argue that I’m comparing apples and oranges here and that it would be impossible to divert that money to help sick kids. The truth is that it couldn’t be easier. It’s a simple decision. A stroke of a pen. Nothing more.

Instead of helping sick kids in Canada, our leaders (and I choke as I write the word “leaders”) have chosen to take $122 million of my money and your money to bomb some country on the other side of the world. A country that poses absolutely no threat to us here in Canada. When bombing campaigns are conducted civilians always die. Part of civilian casualties are children. So our money has gone to inflict injury on children rather than helping them. Do you know what the probability of getting killed by a terrorist is in Canada? Absolutely Zero! Further to the point, there is a growing belief that ISIS is really just the CIA trying to provoke war. (Who knows?) After all, war is America’s largest export. Anyway that is an entirely different topic.

The difference between doing good versus bad is a very simple thing. It’s just a choice. As the Grail Knight said in Indiana Jones and The Last Crusade, our leaders have chosen “poorly.”

New boss same as the old boss

So Kelowna has selected a new city council and we can look forward to “change”. It amazes me how politicians cling to the word change when they are conducting election campaigns. Politics is as distant from the word “change” as the Mafia is from the word “peace”. So one of the first official acts of our new, shiny, going to bring about change, power to the people city council is……wait for it…..A Tax Increase!! Oh what a shocker. I never saw that one coming. Of course we have to finance the building of a $48 million new police station. Why not? The rest of the western world is militarizing their police force, why not Kelowna? Of course this is being forced upon us by the federal government who know that Canadians are soon going to rebel against the direction this county is taking as well as a global financial meltdown. We’ve got to keep those citizens in line.

The entire percentage based taxation system determined by the value of the property is corrupt to begin with. If property values increase, it does not mean that garbage collection costs increase. This is a pure windfall for the government. Only a government could come up with this scam. This puts Bernie Madoff to shame. Let’s not forget the fact that property values have doubled and in some cases tripled in the past 15 years in Kelowna. As a result, tax revenues have double and tripled. So what happened to all of this additional money stolen from the property owners? To add salt to the wound, property taxes have also increased every one of those past 15 years. What the hell is going on here? I’m looking at my property assessment notice and it shows that the value of my property has increased by 14% over the past year. So without a tax hike I will be paying more taxes already. So I’m being double taxed as city council has approved a 3.41% additional tax increase. Thanks a million new city council. You guys are a great improvement from the last mob of tax grabbers.

America has fallen

It is quite surprising that main stream media has paid little attention to this fact, but as of December 4th of 2014 the US economy is no longer the largest economy in the world. The title of “World’s Leading Economic Powerhouse” now belongs to China. Not since the presidency of Ulysses S. Grant (1869-1877) over 140 years ago has any other country in the world wore this championship belt. The US now runs second with a GDP of $17.4 trillion to that of China with a GDP of $17.6 trillion. GDP is essentially an economic measure of total production of a country. This changing of the economic guard is even more astounding when you consider that back in the year 2000, the US had a GDP of nearly three times that of China. In a mere 14 years this lead has been completely erased.

With all news of late you must do some critical thinking and research of your own. One major contributing factor to the Chinese economy is the present building of a massive amount of government funded infrastructure. The communist Chinese government is building entire cities in the middle of nowhere. You really need to check this out on YouTube. There are empty cities all over China that have been built within the last few years. These cities that are built to accommodate roughly one million people per city essentially sit empty today. At present, China is building on average 10 of these new cities every year. They are modern ghost towns. It’s really quite eerie. Regardless, this construction is included in China’s economic activity.

Now China is not the only country that massages its GDP numbers, the US is also guilty of doing this. The difference is in the US the government has simply been manufacturing debt. Both are equally as dangerous and misleading, but at least China will have some tangible assets as a result of its spending.

Not to worry though, the US is still the champion when it comes to overall debt. Just a few weeks ago, the US pushed its debt ceiling through the $18 trillion mark, allowing the US to maintain its heavyweight title of the largest debtor nation in the history of the world. China, with almost five times the population of the US, has a national debt of a mere $5 trillion.

Make no mistake; we are living in a period of change. Change is consistent throughout human history. At one point in history it was the Roman Empire that ruled, that changed hands to the British, who then handed the title over to the US. It is now the US’ turn to pass the baton. On a personal note, I have a great deal of trepidation with the fact that a communist government with a deplorable history of human rights is taking control of the helm. That being said, except for the communist label, the same could be said for the previous empires.

Long live gold

There is a little known landmark decision coming up in Switzerland on November 30th of this year which could affect the currency market around the globe. It could actually turn the financial world on its head. The people of Switzerland (notice I said people, not government or central bank, but “people”) will vote (notice I said “vote” not told or forced, but “vote”) whether to back their currency by 20% with gold. This will be the biggest event in sound money history since Nixon took the world off of the gold standard in 1971 to finance the Vietnam War. I think it’s important to note here that in the so called “Land of the Free” only one person made this decision to come off of a gold standard for the entire country and world. While in Switzerland, the people will make the decision about the future of their currency. America, you should be taking notes on how democracy works.

Switzerland may be a small nation, but it is a nation proud of its independence and its history of standing up to tyranny. Switzerland has garnered the reputation of being a “tax haven”. But realistically a tax haven is simply a term for a country that allows people to keep more of their own money than the US or EU does, and doesn’t attempt to plunder either its citizens or its foreign account-holders. If a 'Yes' vote is achieved on Sunday then the Swiss franc will be the only currency on the face of the planet that has any value whatsoever. At the end of the day all other currencies on the globe, including the Canadian dollar, are simply a lie and have absolutely no intrinsic value at all. Actually, let me correct myself. The true value of all other currencies is simply the BTU (British Thermal Units) of heat that can be derived from burning the paper. If a 'Yes' vote is successful this will be a return to sound money and will limit the amount of currency that the government can just print out of thin air. This gives power back to the people and places handcuffs on government spending and will halt the destruction of the purchasing power of the Swiss franc.

Now many times over the past few years there has been opportunity for the right thing to be done and yet the wrong thing happens. Canada had a choice as to whether or not to bomb Iraq. The wrong choice was made and we have gone and invaded that country. The US Federal Reserve had a choice to deal with the global debt situation and stop printing money out of thin air. They made the wrong choice and kept printing money. US Congress had a choice to stop raising the debt ceiling in the US. The wrong choice was made and the debt ceiling was shattered. As much as I hope that the Swiss people choose to reinstate gold as backing for its currency, I think somehow the powers that be will manipulate the vote or demonize gold and scare the people out of doing the right thing. That being said, at least this issue is on the table, the right thing is being offered as an option, and it shows that people are waking up to the criminality of central bank currency manipulation and destruction. The winds of change are a blown’.

Read more Economics Made Easy articles