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Saturday, 19 January 2013

Retail Sales Survey time

It's that time of year again when I have to fill in the retail sales survey and I'm afraid to say that once again I will be ticking the 'more than 5% increase' box.

In a week where we have seen many large retail chains go under, Nigel Farage on Question Time has indicated that a further 140 chains are in financial difficulties, I find myself in the rather strange position of having delivered on the intentions I set forth, which can only mean that my analysis of the situation, the fundamental assumptions upon which I have operated and the decisions I have made have been entirely correct.

So what is it that other local businesses have been missing, where have they been going wrong? The JEP offers a solution but I am afraid, that is no solution at all. The fundamental issue is that Jersey is simply not big enough a market to sustain a business.

Think back a few decades and even before the invention of the computer Jersey businesses depended on overseas sales, fortunately in those days we had no shortage of overseas visitors. The government destroyed that through over-regulation, by intervening in a market they had not understanding of.

Local retailers cannot provide the range of goods required, at the prices required by selling to the local market only. That is not them ripping anyone of, that is simply a result of economies of scale and the lack thereof in Jersey.

So my intention, my assumptions and my direction was to service the international market and offer the same goods and services at a cut down price to people in Jersey. The prices in the shop are lower than my price on the internet and my price on the internet is the lowest - but even I cannot compete with Amazon's buying power, so I don't try. I get goods from suppliers who refuse to sell to Amazon, because their concern is for the long term future of their brand and not for six months of high sales and then no future at all.

So back to the retail sales survey. My results exclude international sales, which is done under the auspices of a different business entirely and so the results measure only like for like sales made in the shop in Jersey. It's pleasing to have the support of the Island, but it really isn't necessary to the future of my business. I may not get any awards from the States of Jersey, but then I don't work with them. I prefer success to recognition.


Thursday, 17 January 2013

On the campaign for Option A

It would seem eminently sensible if all supporters of Option A were working together and could agree a single argument which could be put to the public as part of the debate.

It seems a shame to waste the opportunity that this referendum offers to build a more effective States of Jersey and to restore the Parishes their due honour.

If we accept that subsidiarity should be the organising principle of any society; whereby responsibility rests with the lowest competent authority, and wherever possible that is the individual, then de-centralisation should be the watch word for any government.

Let us look at all the positives that arise from returning the Constables and with them hopefully a lot of responsibility back to their parishes, as an example of why subsidiarity is the favoured basis of all organisations from the Catholic Church to the European Union.

A Constable fully focussed on their Parish is the best possible outcome for all the people of Jersey.

Option A is not a vote against the Constables, it is a vote for the superior representation, financial discipline, approachability and indeed for a continued rasion d'etre for Jersey's greatest institutions, the Parishes.

FINANCIAL MANAGEMENT

In terms of financial management, the Parish is far ahead of the States of Jersey. Every Constable must face daily scrutiny from not one, but two Procureur du Bien Public, who are entrusted with ensuring that the parishioners money is utilised carefully and correctly. This is a very effective check on the Constable and a great public service which is given free of charge by these truly honorary officials.

Then once per year the Constable has to be ready to answer any questions that any parishioner may have and to ask the assembled parish for funds to pay for any plans he may have and to cover the costs of administration and maintenance.

Given the high degree of interaction with the individuals who make up each parish it is not surprising that Constables are most likely to be elected unopposed.

By comparison the States of Jersey is just one big opportunity for corruption and fraud. Elected officials have to face the public just once every 3 to 6 years and in the mean time are left to get on with whatever they wish. They are not exposed to the inhabitants of the island but only to the small group of senior civil servants who do not necessarily share the same experiences and therefore the same viewpoint as the majority of people in the Island.

The expenditures of the States are given far less public scrutiny and we are not able to overturn a single decision regarding how and where our money is spent, we are not allowed to vote out a single increase in any form of taxation.

OPERATIONAL EFFECTIVENESS

The difference in the effectiveness of Parish Welfare as opposed to Income Support is a case which illustrates the superiority of the Parish system over the Civil Service bureaucracy.

Parish welfare was administered by honorary individuals and delivered what was intended; short term financial assistance to those in need. Whilst there is a provision in the Income Support (Jersey) Law for emergency assistance the average delay between applying and receiving a decision is two months. Whereas before one was able to make a representation to the Constable and receive assistance at times of acute need immediately.

For those in need it should not be a matter of a box ticking exercise, it should not be a matter of entitlement or vague legal arguments about whether you fit the right mould or not, but about Christian charity.

In terms of delivering 'customer service', the Parish administration is far superior to the Civil Service bureaucracy.

SO WHY VOTE OPTION A?

If the parishes outperform in terms of both financial effectiveness and in terms of customer service, then why have we in Jersey, allowed the States of Jersey to remove so much of the responsibility from these agencies, and therefore from us?

By bringing the Constables into the States, we have burdened these poor individuals with a split role, a lack of focus. And whilst many of our Constables have out-performed many of our other States Members one has to wonder how much more effective the Parishes would be if the Father of the Parish was focussed solely on the area of his responsibility, which already works best for US.

The States of Jersey is increasingly out of touch with the people, direction-less and destined to fail both economically and politically. It is important that something is left behind when this occurs to ensure that what is truly important in our daily lives is provided for fairly and as economically as possible. That role is the future for the Parishes and for that future to occur we need our Constables to be fully focussed on providing those services.

Organising the Campaign for Option A

In the absence of anyone else stepping up to organise the campaign for OPTION A, I thought I might step up to the plate and organise one.

The basis of preparing the campaign would be:

1) To identify people willing to work on it.
2) To agree a positive message about the benefits of this option.
3) To create an ad hoc organisation which the States would be willing to fund.
4) To carry out the campaign.

Is there anyone else who is organising one?

It's not too early to start so if you are supporting Option A, let me know.

The first step is to hold a meeting for those interested to decide an agenda.

Golden Jackass: The US Dollar is toxic


The typical human reaction to any infection, vermin, danger, or toxicity is to stand back, to isolate the agent, to trap it, to prevent its further spread or release, then to remove it in a safe secure way if possible using trained professionals. Eventually decisions must be made on the level of acceptable risk on the removal, like what is willing to be lost or damaged or killed in the process. Risk analysis, cost trade-offs, and minimization decisions must be evaluated and executed. The toxic agent in global trade, global banking, and global bond market is the USDollar. 

In 2009, the Jackass began making a certain firm point. Those nations that depart from the entire USDollar system early will be the leading nations in the next chapter, with stronger foundations, richer solvency, emerging economies, healthier financial markets, efficient credit engines, growing wealth, stronger political helm activity, and better functioning systems generally. Imagine a contaminated blood system that infects, corrupts, and destroys all interior organs from the spread of the toxin. 

Those nations that stick with the crumbling USDollar system stubbornly will find a horrible fate with devastating effects, rampant economic damage, broken financial markets, sputtering credit engines, tremendous loss of wealth, wrecked supply lines, poverty spreading like wildfire, ruined political structures, social disorder, isolation from the rest of the world, and a fast ticket to the Third World. That is EXACTLY what is happening in the last several months. A division has begun, as the East has been busily installing the next generation platforms, as related to trade, banking, and commercial integration.

NEW ASIAN TRADE ZONE
The division between East and West actually accelerated when the extremely ill-advised decision for Iran sanctions was made by an increasingly desperate United States Govt and its handler on the Southern Med. The division continues, matures, and develops with each passing month. It has become a story, as the Eurasia trade zone concept has been born. It has a long way to go, but Asia however has made great strides lately in unifying commerce. The climax event of the Asian trade zone conference held in Vietnam could not have been more important, as they rejected the US-led plan. The Asians partners and players even rejected the United States from the entire Asian trade zone, but did include Australia and New Zealand. The incredibly stupid naive US-led plan, the Trans-Pacific Partnership, attempted to create a trade zone with Asia which would have blocked China.

Imagine the incredibly obtuse blockheaded maneuver of trying to have all of Asia not conduct facilitated trade with China, its leading trade partner. Talk about shooting both legs and genital region with a double barreled shotgun! This is the signal flare of US political stupidity that has turned highly destructive for the USEconomy and its people. Such failed leadership and counter-productive initiatives will push the US into the Third World even faster than previously thought possible. The isolation is firming quickly. Most of Asia does not wish for strong trade ties with the United States, most likely since they do not see mutual benefit. They see a ravaging appetite to grab capital.

A Paradigm Shift is taking place, and the ASEAN-China summit gave proof positive in a seminal event of the vast changes in progress. The United States just suffered its worst humiliation ever as a nation on the Eastern global stage. It was exceeded only by the humiliation for a US president personally. The story went uncovered by the lapdog inept US press. The late November Asian summit meeting held in Phnom Penh included 15 Asian nations, which represent half the world's population. They decided to form a Regional Comprehensive Economic Partnership that excludes the United States. 

The Asians are pushing to isolate the United States. Regard it as punishment for hegemony, or a reaction to prevent further capital drainage, or to protect from central bank abuse, or to wall off continued bond fraud export, or to defend against military aggression. Regard it as confirmation that China is the regional leader in Asia, even for military security. Regard it as a response to banker criminality, or simply for being totally full to the brim of American corruption and arrogance and abuse of position, led by creation of the US Dollar as an elaborate weapon and credit card whose balance is never to be repaid. Abuse of power and sponsored financial corruption will have extreme consequences in the reshaping of global commerce and banking. The US will be isolated, so as to protect the rest of the world from its fascist exhibitions and deep manifestations.

FLUSHED NATION
The shift is in progress, and the American people have no idea what is happening. They are too pre-occupied by the agency torture of the population, urgently needed to remove guns and to create the police state. Current events are heinous and genocide on large scale and small scale. Any comments will be limited on the orchestrated travesty, travails, and tragedy. They all have one traceable element, which connects to a certain Virginia suburb where an intelligent pillbox operates in the shadows with puppet strings to the press networks and maybe Hollywood. The security agencies turned to the dark side years ago, with full devotion to narcotics, money laundering, and collusion with the castle dwellers. 

When the Praetorian Guard plots to bring about a police state, the only words that come to mind are disaster, disorder, mayhem, betrayal, degradation, death. Their tools are psychotropic drugs, violent training, weather altering devices, and basic sabotage. Treason is the calling card unfortunately for much of the US leadership class, whether banking, politics, economics, pharmaceuticals, or news networks. Think Syndicate, as my work has described for several years. The United States with its harsh new visa policies, molestation at airports, heavily defended borders, sponsored gun running, has shown a vicious visible visceral fascist streak that has begun to bring memories of the national socialists of Central Europe 70 and 80 years ago. They are back, stronger than ever, not having been eliminated. They were instead assimilated within the banking and security organizations, able to plant seeds which germinated with the sons in offspring. Two sons became presidents.

DEUTSCHE MARK GONE
In the 1960 and 1970 and even 1980 decades, the favorite currencies off the standardized tables of commerce were the USDollar and DeutscheMark. At one time in the Soviet Union and the Soviet Bloc of Eastern Europe, more USDollars and DMarks were in circulation than official Russian Rubles or Polish Zlotys or Hungarian Forints or whatever. Those years are long gone, as in long gone, all paper alternatives lousy. Under a strange bizarre compromise arranged to assimilate East Germany and to conceal the French sovereign debt, the Euro Monetary Union and the common Euro currency was born. It is now in the process of disintegrating.

So the powerfully strong and stable German DMark went away. Store owners and wise families were eager to obtain USD and DM currency, even young kids. There was vast black market activity in Russia, where the US$100 bill was a favourite  In that era, Gold was not an item of pursuit or stored wealth. Times have changed radically, and Gold is the new store of value.

Times have changed with the sunset of the DMark and the toxicity of the USDollar. The people, the shop keepers, the business men, the small financial firms, they all have been turned upside down in recent years as they struggle to find a safe place to store wealth. Money has been corrupted. The purveyors of money have lost control by accelerating its supply by central banks, lost control of bank solvency, lost control of anything remotely acting like an honest tether to money itself. As a result, all those people, the shop keepers, the business men, the small financial firms, have been discovering Gold & Silver bars and coins.

Their combined actions have resulted in an implicit isolation of the USDollar, even an isolation of the Southern European sovereign debt. Swiss havens have grown, in parallel with Gold havens. The toxic monetary plague has been identified, and its toxic sources too. They are the US Federal Reserve and the Euro Central Bank. They are ruining money, undermining wealth, and destabilizing the entire world related to wealth, banking, commerce, and economies. The armies of people, the shop keepers, the business men, the small financial firms, are working to isolate the USDollar as toxic agent in a demonstration of survival.

FREEDOM FROM DELUSION
Many bright people within the gold community cling to hope, harbor delusions, and maintain expectations, none of which have much value in the fast changing world of fascist entanglement and full integration. The Jackass has operated without delusions, firmly in belief that the corrupt systems would flourish. That viewpoint and operating principle has proved to be correct since 2004 when the Hat Trick Letter began to spout deeply disturbing forecasts. 

One after the other, most of the forecasts have indeed occurred, to the detriment of the nation and its systems and its society at large. No pleasure has come from forecasting a wrecked housing market (burdened by lax underwriting and bond fraud) or a broken insolvent banking system (from bond losses and dependent upon money laundering) or a desperate chronically USGovt budget (dragged down by adopted socialism and sacred war costs) or a spreading Southern European bond crisis (addressed only by higher subordinated toxic paper).

No pleasure is taken from seeing vast legions of struggling Americans, including a few close friends, who have lost jobs, lost homes, lost savings, lost pensions, and lost a valuable sense of security, as they continue to hang on. Many might actually find the warmth of the official camps, only to disappear later on. 

Argentina and Chile had their desaparecidos, and so will the United States. My ugly expectation is that before their bodies are incinerated, vital organs will be extracted for black market gains. Inoculations upon entry will assure them of good health and fully functioning organs. Later, vaccines will infect them, just like with the swine flu vaccine. By the way, in Costa Rica a brief story to enlighten on vaccines. In early 2008, the Jackass advised a couple families with numerous children and cousins in school to reject the swine flu vaccine that was promoted by the school authorities at the urging of US officials. They took my advice after their confidence was won on several other matters. Only one of about 20 children took the vaccine. She has been sick with a mysterious cerebral disease for over two years.

My mention of searching for Guillain Barre symptoms has not helped. The mothers are grateful, as they did not understand at first my emotional outburst to discourage following the school advice. The official US camps will involve forced vaccines. Later on, false stories will be promulgated that the dead bodies were the result of already sick people entering the camps for quarantine purposes. In reality, the people would only have suffered from hunger and exposure and despair.

Hope is not part of my forecasts, but rather the reality of the corrupt human power game mindset. The US banking, economic, and political leaders can easily be expected to continue their corrupt games, with easy forward calls. No expectation of USGovt regulatory agencies is part of my forecasts, but rather the reality of their nearly perfect track record of big bank loyalty and fraud protection. The US regulators can easily be expected to continue their corrupt games, with easy forward calls. 

Clinging to precious metals mining stocks is not part of my forecasts, a decision made back in early 2008. They are bound in paper wealth, subject to inflation in share dilution just like the USDollar, vulnerable to jurisdictional confiscations, and at the mercy of labor unions whose production is increasingly halted. Unfortunately, too many fine people within the gold community, including GATA, hold firm on hope, regulators, and mining stocks. Not here! The major financial networks rely upon advertisement revenue from Wall Street, fund managers, an market exchanges. GATA has a business model that has one key vulnerability, with strong links to the mining firms. It has tainted their viewpoint sadly. My support of GATA is firm on challenge of USDollar legitimacy before the Supreme Court, on challenge of US regulators to enforce the law, on challenge of the big banks to prove their solvency, on challenge of the central bank to reveal their activity. But the Jackass does not expect the Supreme Court to ever rule the USDollar as illegal, nor the US regulators to ever enforce the law, nor the big banks to ever remove themselves from corruption, nor the central bank to ever conduct business in opposition to the biggest banks under supranational orders.

My personal background has taught me well that a corrupt system never corrects itself. Instead, it spins out of control with broken platforms, layered mechanisms to impose its servitude and influence, complete with side projects to illicitly support itself. See the theft of Iraq gold and theft of Libyan gold. Their people will never again see that wealth. The US system will remain broken until it collapses, never to be corrected until after its collapse.

The Jackass does not align with the expectation of mining stock rise. The stocks are paper wealth in a new era of paper wealth implosion, during which inflation of shares through dilution is rampant. My full expectation is for physical metal prices for Gold & Silver to rise, while mining stocks continue to fall in value from dilution and reduced metal output. The leverage is a mirage when large deposits are seized by desperate foreign governments in need of income. What on earth is complicated about understanding this point?? The leverage is a mirage when workers are the focal breakdown point for a higher cost of living. If workers cannot afford to feed their families and survive, mine output will suffer. What on earth is complicated about understanding this point?? The leverage is a mirage when rising mine operation costs must be handled, by the simple practice of share dilution. Combine with regular executive stock options, and the dilution on stock shares is huge. What on earth is complicated about understanding this point??

POWERFUL CORRUPTION INERTIA
Corruption Inertia is a principle firmly believed in when Jackass forecasts must be made. The corruption will continue with firm immutable momentum, without an external force acting as agent of change. At times, this is simple science. When colleagues introduce hope and what must be, the OFF button is engaged quickly here in my office. Their views are out of touch with reality. Corruption will persist as long as the Syndicate continues to hold power. It will remain the constant while the USDept Justice remains, while the USDept Treasury remains, while the US Regulators remain, even while the US debt rating agencies remain. They all support the current system. They are all subject to momentum pressures. Only an external force will result in change. When the USDollar is further isolated, that change will come. To expect change from the inside due to internal forces is lunatic, kind of like expecting an alcoholic to change on his own from an awakening. Al Capone was removed not from inside the Chicago crime boss conference of dons. He was brought down by external forces related to income tax. The world will similarly reject the USDollar for its tax on the system, unwanted, discarded as a toxic agent.

PROTECTION FROM THREAT TO WEALTH
Again, delusion works well when fashioning a creepy little shell of existence to protect oneself from the psychological damage of a predatory government syndicate or security agency apparatus. The Jackass mocks such defense mechanisms, since a guarantee for poverty and misery. The vast legions of Americans will soon awaken to find their jobs are hanging by threads, their wealth either vanished or converted to USTreasury Bonds by force, their liberties long gone, and their ability to seek out foreign lands for residence curtailed. In fact, one nation after another is actually banning acceptance of Americans for bank accounts. See Switzerland, Panama, and Hong Kong. The US subjects are seen as persona non grata not for their own characteristics, but for the passport they hold from the United States. The USGovt as lord acts like syndicate bullies, agents to abuse embassy privileges, with imposed extra legal paperwork like an extra burden. The isolation is not only of the United States, but of its citizens, whose business is not desired. Hence the Americans will increasingly be trapped in the US along with their money. The Jackass response to threat is not to embrace delusion, and not to seek a blanket to cover my head in the basement quarters. Instead, the response has been to head for the hills with pockets filled.

People, both clients and colleague, inquire when the Gold price will rise with vigor, when the mining stocks will rise with gusto. They remind that with all the central bank debasement of currency from Zero Interest Rate Policy and Quantitative Easing, the ultra-cheap, artificially cheap, desperate cheap money to finance USGovt debt should make the Gold price zoom upwards with each QE official announcement. My answer is quite simple. Each new QE program gives the dark forces more motivation to slam the gold price with naked shorts in sale of paper gold and paper silver. To be sure, the true value of Gold and the true value of Silver is higher, but it is not reflected in the COMEX price. That market is the epitome of corruption. If they were in charge of measuring fevers, they would place the thermometers on ice. Instead, a vast divergence comes between the paper Gold price and metal Gold price. Unless and until the Gold market is freed from corruption and freed from the shackles of Wall Street and London and Swiss influence, it will continue to be suppressed. My full expectation is not for the system to correct itself from within. Instead, the COMEX seeks out new sources of supply, like the GLD Exchange Traded Fund. It is probably far more gutted than publicly stated. It has been converted into a bullion bank central repository for easy raided inventory. The Gold price will not rise from internal forces to push up value, in response to central bank monetary policy or shortage of COMEX inventory. The Gold price will rise from external forces in USDollar isolation, along with isolation of the big banks in the US and London. Their gold inventory will be removed, returned, and drained. In time, the USDollar will widely be rejected in trade.

THE NEW ISOLATION HAS BEGUN
The process of isolation is not just now beginning. It is a process well along. In fact, it has been told that immediately following the Lehman Brothers death (a deliberate exploited execution) and the adoption of toxic vats by the USGovt in the form of Fannie Mae and AIG, the major foreign players located primarily in the East began to feverishly prepare for new platforms on trade and banking. They sought to develop an alternative. For the last 20 to 25 years, a backwards principal has been at work. It dictated that the USDollar would prevail in reserves management, actually the USTBond as vehicle. The rules for trade surplus recycle were constructed to lean toward usage of the USTBonds. Therefore, the global trade would be dominated by USDollars. In other words, banking would dictate trade settlement. That is backwards, and keenly exhibits the brute force of the USDollar hegemony. Also the crude oil payments have been standardized in USDollars, ever since the Saudis cut a major deal with the USGovt and UKGovt in the mid-1970 decade after the famous embargo. Protection came to the Saudi regime and Persian Gulf emirates, in return for exclusive USDollar payment on trade for oil. The Petro-Dollar defacto standard is the primary plank behind the USDollar global trade patterns shown for over three decades. It is coming to an end, a sunset.

IRAN SEMINAL EVENT
The Iranian sanctions put forth by the USGovt and adopted by the EuroZone nations have contributed more to unwinding the USDollar trade system than any event in decades. It sounded the death knell for the USDollar. It hastened numerous nations to seek a US$ alternative. It provided a fertile environment to fashion new trade settlement mechanisms. It pushed Turkey into acting as a gold bullion intermediary role in the provision of gold for usage in trade settlement. See their role with India and Iran, fully described in the December Hat Trick Letter. When an independent highly reliable gold trader source was asked to confirm the role of Turkey as a test case in developing gold based trade settlement, he gave a tacit confirmation. He has mentioned Turkey in past conversations over the last couple years frequently. Just as Turkey was a swing nation in the NATO alliance against the Soviet Union, Turkey will serve in my view as a critical swing nation in the movement to create a non-US$ trade settlement system. The new system will be decentralized, meaning not funneled through the major banks, not passing through the USFed as clearing house. Turkey will be essential in the formation of the Eurasia trade zone. First comes the Asian trade zone (the US excluded), and next comes the hand shake between the Asians and Europeans to create Eurasia. Some folks have expressed doubt toward the arrival of a vast trans-continental trade region. They seem painfully unaware of an incredible network of railway lines connecting Russia to Germany and China, and of a incredible network of liquified natural gas lines connecting Russia with all of Europe and Central Asia. Across the new trade zone and its diverse commerce, the USDollar will not be at the center. It is in fact being isolated, since it is a toxic agent. Everything US$-based is crumbling, from currencies to bonds to banks to credit lines to economies.

CHINESE YUAN BILATERAL CURRENCY SWAPS
The advent of barter has come. It has not been noticed by the incredibly distracted, misled, deceived, poorly trained, mentally challenged, and myopic American public. They read about a currency swap accord, give it no emphasis or importance, and then turn to the fund manager opinions on rotating stocks from one sector to the next. They read about a workaround to the Iran sanctions, express some puppet-like response of anger or disgust, and then turn to IPOs and stories on Google, Apple, and Facebook shares. They do not even read about the failed Trans Pacific Partnership, since it did not make it onto the financial pages. Sadly, the Jackass is slowly adopting a cold view that vast swaths of the US populace will suffer from a Darwinian event. Their home equity has vanished. Their job security has vanished, unless they work for defense contractors. Their pension funds have been damaged. Their wealth has been over 90% dedicated to paper securities in very obedient fashion. The great majority has dismissed the arguments for sound money or gold investments. Some have a pitifully small portion devoted to hard assets like perhaps some energy companies. Only those who adopt a Gold strategy will survive the powerful storm underway, as it intensifies. Great wealth is being destroyed, and only Gold & Silver will enable that survival by the construction of lifeboats. Paper wealth is being blown away, as only hard metal assets will prevail. Add energy and farmlands.

When people ask about the best allocation, my standard response is at least 90% precious metals, the rest to energy deposits, but not actually stocks, perhaps farmland if possible. The best diversification in my view is for laddering of silver purchases, starting at $10/oz and moving to $15/oz then $20/oz and finally to $25/oz with continued accumulation at $30/oz and above. Gold will win the monetary war, but Silver will take the greatest gains. Gold is fine for a more stable long-term protection against toxic paper wealth, but my ongoing objection is that the New York, London, and Swiss syndicate centers play too many games. Silver is subject to global shortages, vast industrial demand, non-replaceable usage, and a much more dangerous situation that the powerful dark forces cannot manage. Silver coins will be widely used in commerce, while Gold bars will thrive in banking transactions. Besides, killing werewolves is the zinger factor with silver bullets.

China has made numerous bilateral swap accords with other nations. As the label indicates, they are deals cut between China and another nation to freely use Chinese Yuan from a credited account that will retain equilibrium. So far many nations have signed up and even renewed deals. The list of nations includes Brazil, Russia, Japan, and India. One might be correct to include all of Asia on the list, as nations like South Korea and Taiwan and Vietnam freely trade in Yuan transactions. The first major signal that the bilateral swaps have taken hold sufficiently to undermine the USDollar through a new trade foundation will be the complete arena of Asian trade being conducted in Yuan transactions. They have no need for USDollars in trade. They see their USTBonds held in reserves under management as vulnerable to serious loss. They see their USTBonds held as subject to grand debasement from USFed central bank monetary policy itself. They see their USTBonds held as supported by Weimar machinery in hyper-drive. They see their USTBonds held as part of a corrupted Wall Street arena and its vast trappings. They see their USTBonds held as prisoner to the USGovt debt battles and a potential crush victim on a fall from the fiscal cliff.

The Chinese bilateral swap accords are actually barter deals. They often represent rather balanced trade, unlike with what the nations have set up with the United States. Unless nations purchase enormous lots of military hardware, they have little need for US products. Hence the end result is a bigger batch of toxic USTBonds to purchase in order to balance the accounts and to avoid the local foreign currency exchange rate from rising enough to damage their export trade. The bilateral swap accords work to create numerous two-way ties as part of a latticework that eventually will form a transnational fabric without the USDollar as nuclear cores in each connection weld. The bilateral swaps are barter without the name in a direct confrontation against the USDollar and its catbird seat. That seat, once a throne, is being dismantled. The latticework of bilateral swaps has created the critical mass of a global blanket with no centralized control room, no choke points with bank transactions, no SWIFT code ticket taker. The bilateral swap accords work to build a critical mass that isolates the USDollar from an entirely new foundation for trade. The USDollar is being isolated.

COMEX PRESSURE POINT
The COMEX is under constant unrelenting pressure. They must shift around ill-gotten precious metal inventory in order to avoid a default. That would be embarrassing. The main device for maintaining order at the COMEX continues to be naked shorting of futures contracts, a blatantly corrupt practice. The naked short ambushes occur with greater frequency in recent months. The arrival of Scotia Mocatta as a provider of gold supply and naked short commitments will kill them eventually, as they have made a deal with the devils. The overnight dispatch of silver from the US to London has grown enormous. One can only suspect that the raids of GLD gold inventory and SLV silver inventory is much greater than is estimated even by its most ardent critics. The illicit sources for COMEX precious metal are fast drying up.

The new wrinkle to render damage to the COMEX is the arrival of the Shanghai Gold Exchange. The graphic displays the differential, a basis for potential arbitrage. Complex arrangements can be constructed that take advantage of the differential, basically buying the gold metal in New York, finding a way to make it available in Shanghai, where it is sold at a $20 to $30 higher price. The end result of the arbitrage is high volume drainage of gold in New York. The snapshot below is taken from December 7th. Several other snapshots are available, with similar price spreads. Finally COMEX based in New York, a major nucleus of corrupt financial markets, has some competition. Expect the spread to widen, the opportunity for arbitrage to grow, and pressure to build for a breakdown.


Sadly for the evil camp, they are fast running out of sources. They stole the entire MF Global private accounts, denied the clients their legal right to receive silver in delivery, and received legal protection by the USGovt and Appellate courts, after changing the law applied to financial firm liquidation instead of brokerage firm liquidation. It was a blatant maneuver that has depleted the COMEX of a major slice of legitimate business. The subsequent similar raid on PFG-Best had an echo effect, adding to the removal of COMEX clientele. The end result is that the risk hedge trade is finding ways to conduct their business without use of the indescribably corrupt COMEX. So the COMEX is being isolated in risk hedging just like the USDollar in global trade.

PETRO-DOLLAR SUNSET
The upcoming Petro-Dollar sunset has very uncertain timing indications. The assassination of Prince Bandar in Saudi Arabia, followed by the potential incapacitation of King Abdullah could work to weaken the foundation of the Petro-Dollar itself. Back in April 2010, the Saudis and other main Persian Gulf nations struck a deal with Russia and China for protection in the gulf region. That accord was not given much emphasis anywhere, nor publicity. But to the Jackass, who had a source at the meeting, the event signaled the sunset of the Petro-Dollar defacto standard. The Saudis would turn to Asia for protection and security, at a time when their crude oil trade was growing with Eastern nations, and when the North American production was made more available for the US demand in markets. The day is nigh where the Saudis accept non-US$ payments for crude oil. They might first accept Chinese Yuan, then Japanese Yen, then Korean won, then Gold itself through big Turkish bazaars.The Petro-Dollar is being isolated for sunset, and will be a key event is the removal of the USDollar as center for global trade settlement. Also, the Saudi regime in my view does not have much longer to survive. Numerous companies and financial firms and export facilitators have exited from the United Arab Emirates in preparation for the fall of the House of Saud. The Saudi Arabian royals have unstable neighbors in every border, especially Bahrain, Iraq, and Yemen.

WILD CARD FACTORS
Numerous wild cards float on the global trade table. Bank strictures head the list, with imposed rules on account reporting abroad, with tax information requirements, and with capital controls. It is harder each month to move large amounts of funds. The forms to complete have become onerous and imposing, acting like implicit restrictions. It is harder each month to use simple bank cards at ATM machines. With a simple rule change, the banks cannot complete these transactions. The organized and patterned restrictions work to trap USDollars within the local US borders. Consider it an internal mechanism to assist the global isolation of the USDollar.

LOST GLOBAL RESERVE STATUS
The described isolation on numerous fronts, whether trade or COMEX or banks, all work toward the elimination of the toxic agent in the USDollar. The world wants a more just, more functional, more efficient, more equitable global trade system. The United States has abused its global reserve custodian position too long. The world is fighting vigorously to remove it. The usage of the USDollar as a credit card to finance its consumption binge without ability to pay will come to an end. The usage of the USDollar as a device to enable powerful aggression in war to advance syndicate interests like vertically integrated narcotics will come to an end. The usage of the USDollar as a banking monopoly device will come to an end. The usage of the USDollar as an instrument for bond fraud will come to an end. The usage of the USDollar as a free lunch device to finance the USGovt deficit will come to an end. When the USDollar is no longer the global reserve currency, the door to the Third World will be opened wide. When the USDollar is no longer the global reserve currency, the supply lines will be interrupted to the USEconomy, giving off a prominent Third World stench. When the USDollar is no longer the global reserve currency, the price inflation effect will become a national topic of grand debate and extreme anger. When the USDollar is no longer the global reserve currency, the United States as a nation will experience tremendous additional isolation and hardship, as most Third World nations do. The level of corruption within the USGovt and US banking corner offices is already far more entrenched than any Third World nation. The vote fraud for US national elections is equally prevalent, but more sophisticated.

When the USDollar is no longer the global reserve currency, the Gold Standard will be right around the corner, if not already in the implementation stage. The Gold price will react quickly to the removal of the USDollar from its prized perch of abuse. The center of the new trade settlement system will be GOLD, which is not even being discussed by the enlightened denizens of the gold community. It will be the basis of the Letters of Credit, in the form of gold trade notes. The short-term credit that facilitates trade will have a truly magnificent grand Gold core. The common agreement will be to make the Gold price at least $5000 per ounce, probably closer to $7000 per ounce. They will in the process dismiss, overrun, and put into oblivion the COMEX and the LBMA, rendering them to the scrap heap of irrelevance.

Wednesday, 16 January 2013

This is what it was like in Berlin in 1936


I am struggling with the ongoing coverage of the disciplinary hearings of three police officers, the matter is turning into a farce.

The case law (R. v Metropolitan Police Commissioner) is quite clear; a police officer's first and overriding duty is to uphold the law, even if that means disobeying the direct order of a superior.

We have only to look back to the Nuremburg trials to remain assured that, 'I was only following orders' is not a defence. Gassing Jews because a Crown Advocate says you can, does not make it right, or Lawful.

That the three officers did not take the honourable course and resign immediately is regrettable.

Unfortunately in this island too many are too ready to forget that one is innocent until proven guilty. As an innocent who has suffered such a proceeding I am not unaware of the distress it causes but there should be nothing defamatory about being the subject of a proceeding, all police officers make mistakes, despite what the JEP would normally claim, and these police officers should be fully aware of this.

However in this case, quite openly and clearly the highest Court in the land has stated, without hesitation, that the three police officers involved, were guilty of breaking the law, repeatedly.

Now I may only have an academic interest, but it is quite clear that no Court in Jersey can overrule the Supreme Court. Therefore the three police officers are guilty of committing a crime and there is no further avenue of appeal open to them. We can be assured that had Mr. Warren's trial taken place anywhere other than in this Island the case would have been thrown out. This does not do anything for our reputation internationally.

As guilt has been established it is only possible for them to make a statement in mitigation of their actions and whilst the disciplinary hearing may have decided to take no action, there is no way that an internal police hearing can overrule the Lord Chief Justice and exonerate them from any wrong doing. To suggest otherwise is ludicrous and makes a joke of our judicial system.

This island is becoming increasingly fascist in outlook; the States of Jersey now pay people to inform on their neighbours, the officers of that once great institution are now, it appears, above the Law. Are you living in fear? Unfortunately that is not my style - after all you can only die once and I would rather die than submit to self-oppression through fear.

I wonder if Jersey now is like Berlin in 1936, I think it probably is. I wonder who the lunatic dictator could be?

Sunday, 13 January 2013

Budgeting for 2013

I really should update the picture with the new frontage 
What effect has recent States of Jersey policy had on business?


Recently the Town Centre Manager was reported as stating that we were doing quite well to have only 19 empty shops in town and 3 in Liberty Wharf (does anyone even know where Liberty Wharf is?) and of course since then two more shops have gone on King Street; Barretts and Jessops and Play.com have left the building. I took the liberty of looking round town and finding out what the situation really was.

The vast majority of empty shops are in a straight line from the sight of the former Gas Place car park and now they proceed all the way up to West Centre where Riva Menswear has shut it doors. The other dead zone is around the pedestrian area of Colomberie. Now I have no evidence to prove it but on the face of it, it appears that removing 600 car parking spaces and pedestrianising a street appear to have killed business.

There are also a number of shops that are no longer shops at all, just how many shops have been converted back into housing is anyone's guess, but of course these no longer count as empty shops.

The other thing of significance is that whilst many retail shops have closed and been re-filled, what they have been refilled with is coffee shops and sandwich bars. Now is that retail or is it hospitality? Are there any more people to drink all this extra coffee and eat all these extra sandwiches? No, so the money is being spread thinner - which of course means less tax will arise. Will the shops in the area of Play.com feel the effect of losing that many customers?

Spiralling unemployment and ever decreasing numbers of visitors, (just ask any hotel owner), a finance industry which has struggled to maintain its size (in terms of funds under management) at a time when every government has turned on the printing presses and flooded the world with more funds than there was in 2008, in fact there is now 200% more money in the world than five years ago, but Jersey's funds under management have declined? That is an industry in severe decline, in REAL TERMS it is just 33% of the size that it was and it is expected to pay for an ever increasing bureaucracy.

The future for Jersey looks bleak as a direct result of the decisions made by the States of Jersey, and as usual the assumptions upon which their financial projections were based are fundamentally flawed. They will not collect the tax they are predicting, there may not even be enough in their 'contingency' fund for them to be able to have the 'oh we have more money than we thought we did' headline.

Remember the multiplier effect so for every £1 in tax £1.50 is lost from the economy, is lost directly from profits, for every £1 of tax reduced there is £1.50 added to the economy. I did not see any of those calculations considered in the recent budget. So even if 50p is left to spend from every £1, after the inefficiencies and corruption of government have been paid for, to add 75p of value back into the economy, the economy will shrink. But the economy is shrinking faster than that as capital flees the island for the UK, for Portugal, for Poland and let's not be mistaken the States of Jersey spend a lot of money with the UK - consultants, goods and services and on civil servants, I would be surprised if 50p pf every £1.00 remained in the Island.

So I could do what the States of Jersey are doing and make unrealistic projections but since it is my money and my livelihood I think it's stick to the same plan as I have been following since 2009 cutting the cost and improving the service in Jersey whilst expanding into international sales, making the business leaner and meaner and ensuring that the only body that loses out is the body that deserves to lose out; the States of Jersey. This is easily achieved - don't spend any money with businesses in Jersey and thus avoid giving them any GST, and don't employ people thus cutting the SS and ITIS receipts.

Let's see how many businesses can make their rent on the next quarter day - 25th March 2013 and how many shops are empty in April.

Saturday, 12 January 2013

Court challenge to the Electoral Commission

Having reviewed the findings of the Electoral Commission it is clear to see the Sir Pip has taken the lead from Alex Salmond of the Scottish National Party who likewise on the referendum for Scottish Independence wanted to veer for a simple YES or NO question. Something which Westminster violently stomped on because they knew that adding such complexity would tend to force voters down the centre line and vote for greater autonomy. Sir Pip is now trying the same tactic but we do not have a Westminster to stand up for us.

The question then becomes what are we going to do about it, or as it ultimately concludes, what am I going to do about it?

The question of whether the Constables should be removed from the States is going to be confused by other issues such as should the Senators be removed from States - a campaign to retain Senators is no doubt going to be headed by the man who set Jersey on its death spiral, Pierre Horsfall and will draw a lot of votes to option C. Those who want change but want to retain the Constable will vote for Option B.

The only ECHR compliant option is option A.

If the only legal option is Option A then why are the other options even being presented?

The referendum could have asked two YES or NO questions - Do you want constables in the States? And do you want to retain the island wide mandate?

Instead it has asked two questions as one and likely skewed the results towards option Bailhache.

This is not a fair vote and someone should challenge it in Court... that someone may in the end have to be me.



Thursday, 10 January 2013

Are you an ally of the States of Jersey?


It is with dread that I open the newspaper every night, I live in constant fear that the government will have dreamt up a new hair-brained idea to waste taxpayer money and bring yet further ruin to this once great island. Money that they actually no longer have and so they are now recklessly spending our inheritance from better times when more sensible heads ran an Island we could be proud of. The current crop seem dead set on bringing ever more misery to the daily lives of the people they purport to represent. It could well be a case of rags to rags in three generations if something is not done to stop them.

Imagine my horror to discover that the Chief Minister is going to burn my money by having a new 'imagine Jersey' style public consultation exercise, when the cause of mass immigration is blatantly obvious - the unrestricted growth of bureaucracy in Jersey creating ever more jobs which have to be filled from an already usually fully employed population. Government is the problem.

It was with disgust that I learnt that thrift clubs, the working man's preferred method of saving was to be the subject of double taxation by stealth in the form of gambling commission fees. A fine way to support local businesses which are already under the cosh from the probe happy Treasury Minister.

Imagine the nausea I felt when the Economic Development Minister had the bare-faced cheek to claim some of the credit for the 'success' of Play.com and to discover that the pointless Jersey Business was going to be an Ambassador for local businesses. Anyone considering launching a business had best remember that those that can't, enter public service and so should avoid seeking their advice.

The solution to the vast majority of our problems is so simple that only the government could fail to recognise it - cut taxes and remove unnecessary regulation.

If they wish to reverse unemployment then a) repeal income support and b) repeal the employment law.

If they wish to control the population then cut the number of employees paid for out of taxpayer funds and repeal income support.

If they wish to increase the tax take then repeal GST, lower harbour and airport stealth taxes and lower impots and liquidate the Tourism department, to make Jersey, once again, the duty free shop for France and the UK.

Whilst the government is keen to be seen to be doing more, what we actually need is for the government to be doing less.

The evidence over the past 30 years clearly demonstrates that anything they try to do, not only fails spectacularly, but creates additional problems too.

These additional problems require higher taxes and more regulation which further pushes the island along the economic death spiral we are in. Whilst the civil servants are delighted with the additional responsibility, head count and of course, personal pay rises that result.

Sir Philip Bailhache may be onto something though.

The history of the States of Jersey is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute tyranny over these islands.

In every stage of these oppressions islanders have petitioned for redress in the most humble terms: those repeated petitions have been answered only by repeated injury. A government whose character is thus marked by every act which may define a tyrant, is unfit to govern a free people.

How much longer before the good people of this Island solemnly publish and declare they are of right, and ought to be, free and independent; that they are absolved from all allegiance to the States of Jersey.

Jersey Reform Day is the 28th September, that might be just the day to publish such a declaration.

Wednesday, 9 January 2013

On the subject of independence

I am a firm believer in independence, and of course in non-dependence. As a true conservative opposed to change what has happened to the Western world over the course of the last one hundred years (since the Liberal Prime Minister Lloyd George first introduced a form of the Social Security scheme, albeit not one that we would recognise today it being based firmly on the idea that you cannot get out more than you have paid in).

Subsidiarity is the only basis upon which any successful socio-economic system can be based no matter what governments would like you to believe. The latest figures out today show Spanish unemployment standing at 27% and youth unemployment in Spain at 57%, now I simply do not believe this is true, I believe that there is a substantial 'black' economy where people have decided to circumvent the employment laws and taxation systems and simply work cash in hand under the radar without the interference of the State. This is not a 'black economy' but a 'free economy' and it is a development which often comes just before the collapse of a government.

This resistance is perfectly understandable, if the government seeks to take more money from you than you can afford to give, an action on the part of the government which is immoral and unlawful, albeit perfectly legal. The idea that a government should be allowed to take tax from a person to the extent that they are then required to BEG for their own money back from that same government is nonsensical and is also extremely inefficient as a means of wealth re-distribution. I do not know why so many in Jersey have now come to accept this as the norm. Fundamentally no one should pay anything to society until they have first earnt enough to meet their own basic needs.

The government does this only to promulgate dependence, so whilst Sir Philip Bailhache seeks to achieve freedom from external forces, a cause which I would support but he does not go far enough, he should be supporting independence for every individual, independence not only from the EU and the UK but also from the States of Jersey.

Now on the other hand it is true that the Scandinavian nations are fairing the best through this crisis with what were formerly considered high tax rates, but the difference is that in Scandinavia everyone pays the taxes that the government requests. Therefore the Scandinavian governments are not acting either immorally or unlawfully; the tax they collect is given willingly, or so the evidence would suggest. The Scandinavian people regard their governments as efficient and effective.

I would suggest that similarly here, if we were given the choice of how much money to pay in tax then the majority of people would gladly make a reasonable contribution to the smooth operation of the parishes of Jersey and whatever form of Island government will eventually replace the bankrupt States of Jersey to maintain a quality service to the public. But it would put extreme pressure on whomever was spending the money, knowing that if they were perceived not to be providing a good service or to be wasting the monies they received, then they might not get so much the following year.

Thursday, 3 January 2013

The Jersey Libertarian Party

The time has come to officially register a political party under the Jersey regulations and I am thinking that in the spirit of revolution the documents should be submitted on Jersey Reform Day this year, which leaves until the 28th September 2013 to formulate everything, ten months may seem a long time, but I am sure that there will still be things not yet completed by that date.

I was particularly struck by one comment on the JEP site
"You have to feel for the young generation growing up in a world where 50% youth unemployment is now the norm, where the prospect of ever getting a pension is almost zero, where the standard of living is, for the first time since the war, expected to decline over their lifetime. And Jersey just does not look like a good long term bet."
Whilst at the same time the site is flooded with unionised adults throwing little tizzies about not getting the same amount of overtime or only getting a 1% pay rise, clearly they believe that non-union members should be further impoverished for the benefit of union members. Now that's solidarity, brother.

It is said that the 'right wing' is all about the individual but it seems to me that increasingly it is the unions who are all about the individual; long gone are the original motives for the collective betterment of the downtrodden which gave the union movement its popular support back in the 1860's.

The unions are so conservative, so much part of the establishment, and the world has changed so much in the intervening period that they appear out of date and out of touch to a younger generation who will never be members because there just aren't any jobs to be had.

The government is now so corrupt, so out of touch with the people of Jersey, so entirely focused only on its own plans and survival without any regard for the consequences of its actions on those it is supposed to serve and in whose name it acts, that it is time to put pressure on those who are desperately clinging to power to take their ill-gotten gains and flee and take their civil service cronies with them.

The States of Jersey is now so bloated and ineffective that it needs to be taken behind the barn and shot, its the kindest thing to do, rather than let it suffer the long protracted death which now inevitably awaits it.

Once the government is gone then the people will find a way to re-build and it will be all the more swift for the absence of interference by the incompetent.

Once the old is swept away we can start anew and remember the wisdom of the founding fathers who produced a constitution which contained and constrained the growth of government and endured for almost  200 years until it was finally overcome in 1971. After then the government no longer feared the people, the people began to fear the government.

Calculating the 'true market value' of Jersey property

I have been looking again at the Jersey Property Market, let's look at what the 'bottom of the market' value of property in Jersey (as supported by the income support scheme) truly is:

The Income Support (Jersey) Regulations 2007 currently set the rates for housing component as follows (please note that these are the old rates, the subsidy was increased by around 6% in October 2012 but the website has not been updated so the verifiable rates are utilised):

4      Rates for the housing component

(2)    The rates payable under this sub-paragraph are –
(a)
in the case of a hostel
£76.30
(b)
in the case of lodgings or a bedsit
£109.41
(c)
in the case of a flat with 1 bedroom
£156.31
(d)
in the case of a flat with 2 bedrooms
£196.63
(e)
in the case of a flat with 3 bedrooms
£223.37
(f)
in the case of a flat with 4 bedrooms
£236.88
(g)
in the case of a flat with 5 or more bedrooms
£245.77
(h)
in the case of a house with 1 bedroom
£177.59
(i)
in the case of a house with 2 bedrooms
£231.28
(j)
in the case of a house with 3 bedrooms
£258.02
(k)
in the case of a house with 4 bedrooms
£279.16
(l)
in the case of a house with 5 bedrooms
£303.73
(m)
in the case of a house with 6 or more bedrooms
£318.29.

So using our trusty reverse mortgage calculator on the sums above multiplied by 52 and divided by 12 (to convert from weeks into months) the values can be calculated as follows (assuming a 3% interest rate) some rounding occurs for ease of reading but you can work it out exactly should that be your desire.

One Bedroom Flat (maximum monthly subsidy £675) £142,500
Two Bedroom Flat (maximum monthly subsidy £850) £179,000
Three Bedroom House (maximum monthly subsidy £1,100) £232,000

There are two important points to note here...

Firstly the availability of mortgages which is limited to 4.5 times your earnings, so on average wages of say £40,000, the maximum mortgage you can get is £180,000 so with a 10% deposit that will give you £200,000. So Deputy Duhamel's plan for £200,000 homes is bang on the money, that is what houses need to be sold at to be 'affordable'. By contrast the Housing Minister plans to build 113 homes for £13 million, at a cost of around £115,000 each shows that there is still considerable profit (60%) to be made even when selling houses at £200,000. I know I am not including the cost of the land, but then the cost of agricultural land is negligible, even/especially in Jersey where farming has not been a viable proposition for many years.

Secondly if the interest rate were not being artificially held down by the Bank of England and were allowed to stand at say 10%, as the economic situation demands, a two bedroom flat would only be worth £93,500, and a three bedroom house would be worth £121,000. There is a massive and some might say inevitable risk to the downside.

2008 and 2011 statistics for average (mean not median) wages showed some interesting results which I feel certain were at the maximum range of the stated error in the statistics but still did not show any real increase as the figures were no doubt skewed by a few high earning individuals who got rather large bonuses and were not indicative of any general increase in wages. We know that the wages for the majority of the individuals (those paid by the States or their subsidiaries who make up the majority of the workforce, even higher than under Soviet Russia) will not increase for the next few years. The banks are simply not going to lend at the low rates mandated by the government.

The risk in property is exclusively on the downside. The States of Jersey are incompetent at the best of times. Taking the incompetence and the inherent risk in property speculation at the moment, we are better off passing the risk on to the private sector than allowing the government to play at being a property developer with our money. It's your pension they will be risking, not their own money.

Looking to the official statistics for house prices for Q3 2012 I am struck immediately by the lack of synergy with the asking prices offered on estate agents websites. The clues to how these statistics are manipulated is in the footnotes, firstly 5 bedroom houses are excluded now these are the Victorian homes which make up the majority of St Helier which I can find on estate agents websites for £375,000. Share transfer properties (which were 60% of all flats and generally were the lower priced flats) were not included until 2011 when the mean price started to fall. The survey also excludes 'apparent' family transactions, retirement home and first time buyer developments or in other words any property which sells for a low price, which may of course include sales necessitated by impending financial disaster at substantially reduced rates.

It would make more sense to remove 'new builds' and 1.1(k) properties from the statistics as these appear to be vastly overpriced compared to the larger and better constructed Victorian buildings but ONLY if the aim were to produce reliable statistics and not 'we're not in recession' propaganda.