Topic: Economic Devastation - page 119. (Read 504811 times)

From what I can tell the total current annual government spending of Norway is around 87 Billion USD.


Even if they completly stopped collecting taxes, all oil revenue instantly ceased, and they did not cut any spending they could last almost 10 years just on their savings. Below is a chart of total government spending for Norway. Its shows the amount each quarter (in millions of Krones) so you have to multiply it by 4 and convert the Krone to the USD which is 1 NOK = 0.132 USD currently.




Norway has a population of 5.1 million and government savings essentially equal to $160,000+ per person.
USA has a population of 320 million and government debt of $56,000+ per person

In some past post, I showed that they are very dependent on oil revenue and afair approximately within a year they would deplete their reserves without the oil revenue. Their oil revenue will decline significantly with the drop in the oil price, because many of their deep sea wells will be uneconomic.

For anyone who has not kept up with the Kim Dotcom story I highly recommend you read this story in the guardian.

http://www.theguardian.com/technology/2014/aug/17/kim-dotcom-megaupload-new-zealand-interview


The recent US legal tactic of seizing all a persons money before a conviction depriving them of the resources needed to mount an effective defense takes us several steps down the road to tyranny. Having failed to get New Zealand to rapidly extradite and having failed to keep his assets in Hong Kong competently frozen (his lawyers can now access them for his legal defense) the US has switched tactics and is trying to win via civil forfeiture laws and just take the funds.

Kim Dotcom has now been declared a fugitives from justice for refusing to voluntarily travel to the US while he appeals his extradition. The US is also arguing the Kim Dotcom's lawyers do not have the legal standing to challenge the civil forfeiture in court because of his fugitive status.  

Are these the actions of a free country that respects due process rule of law and constitutional rights?

http://rt.com/usa/207443-kim-dotcom-megaupload-fugitives/

In Europe Norway may be the best choice.

Not tied to the Euro. Very socialist with massive taxation but sustainable (at least for a long while) with zero government debt and massive government reserves. Probably the safest currency in Europe right now. To date they have been fiscally disciplined and keep spending in line with revenues. Redistribution is not necessarily bad if it is sustainable and voluntarily chosen by an educated population with full understanding of the trade offs involved.  

http://www.zerohedge.com/news/2013-07-30/heres-some-data-safest-fiat-currency

Counting all the costs of compliance with regulations it is much higher than 60% in the USA and Japan. Meticulous, perfectionist Japan regulates everything even the gloves worn by taxi drivers. Regulations are very lax in China.

Note the linked page:


Note I exchanged email with MW Hodges back in I believe 2010. I have quoted that email exchanged some where on this forum. But I don't feel like digging for it right now.

In the spirit of having a little fun

I will reply to your rational citation of Reflexivity with its natural antithesis... French poetry from the era of Romanticism

"Armies cannot stop an idea whose time has come. Nothing is as powerful as an idea whose time has come." -Victor Hugo

Of course what Victor Hugo actually wrote was "On résiste à l'invasion des armées; on ne résiste pas à l'invasion des idées." but that lacks the pizzazz of the liberal English translation.

And this is just the power of prophetic motivations.  If you can dream it you can do it and if you can convince enough people of it's manifest destiny then it truly will happen.

Costa Rica is an interesting choice. They managed to avoid having a military!

I'd be concerned about culture for your kids in the schools. Seems too laid back. The "mañana" mentality which is pervasive in any brown skin country (winter forced white people to be serious and productive, long before Socialism destroyed our culture).

CoinCube that is the big open question which is regularly discussed at http://mpettis.com

I don't think it will be smooth. I am expecting a Minsky Moment collapse and I think China will gyrate through war first before settling into a new path of growth. I think this is why Asia won't become the new financial center of the world until 2033. China can't head there in a straight line.

So yes, I am concerned Asia could also be hit with war. This is the reason I am also looking at South America too.

NZ seems far enough away from the China sea. With Singapore citizenship, I bet you could residency in NZ or vice versa, if SE Asia descends into war.

But the other possibility is Japan is really bottoming. They will have a flash crash and finally  bottom. Thus Asia is aligned for mutual interest in a growth model with the Asian Union starting this year.

I suspect Asia might rattle the sabers but end up working together. Japan needs SE Asia.

Now look what you have done. You have totally gone and blown my cover  

Of those Latin American countries Costa Rica is quite nice I found it to be friendly and safe. The people were mostly middle class reasonably well educated and friendly towards foreigners. I was not at all impressed with Panama. Very poor and somewhat dangerous. I did not feel safe when I traveled there. Costa Rica also has low income taxes and no capital gains tax.


I hope you are right and China smoothly transitions to a better system. Historically, however, sucessive Chinese governments do not have the best track record when it comes to smart economic choices.

In an effort to maintain control the Communist party may choose the path of nationalism as you outline above and financial repression via ever increasing government spending/malinvestment. This spending would achieve "growth" and placate an increasingly agitated population for a time. To achieve your more optimal outcome requires the abolishment or at least significant restructuring/reform of the ruling communist party. I hope that happens but it does not seem inevitable to me in the immediate future.

 

OROBTC,

NZ is shifting with Kim Dot.com leading the way politically. It is a member of the USA's 5 Eyes, but the people are turning against their own government. It is a socialist country, but the natural resources far outweigh the population at this point, so the capital is not bankrupted. An influx of high tech workers can transform NZ into a paradise and this is what I think will happen. I am even drooling at the pics of NZ. I wouldn't go for NZ citizenship, but I might live there during the summer. That Kim Dot.Com could so impact the politics there is indicative of NZ being small enough and manageable enough to adapt, unlike the USA which is a social capital morass of epic proportions.

Australia is also shifting politically back towards more conservative but it is bigger morass (incorrigible, youth drugs is very widespread) and less adaptable. But still much more upside than the USA. Has a wider range of climates than other choices in Asia. As a NZ citizen, you can reside in Australia.

Canada is slightly better than the USA for similar reasons, but I agree with you the climate is too cold for me. For many Americans it may be the most practical plan B.

CoinCube is wise to select Singapore as the best of Asia. I agree. Hong Kong is another slightly more turbulent option. And a pathway to leveraging China. You can still get residency and a travel document (Stateless person) there by just landing there and renouncing your US citizenship (a little secret most people don't know, but make sure you check with an attorney first).

I am ignorant of Taiwan. Passed through the airport there only. Met one young man from Taiwan in 1991 in New Orleans and showed him around the French Quarter, then he sent me a calendar scroll from Taiwan! He told me Philippines could never be productive because it is too hot of a country. Decades hence, I agree with his astute analysis.

The corruption of the Philippines is precisely what makes it such a great place to live. The Philippines is for people who hate to have any rules. Filipinos hate discipline. If you like discipline, erudite schools, and an accomplished life, don't migrate to the Philippines! The Philippines is the place to go to goof off. I am about done with the Philippines. I would like to focus more on quality of life and work. The Philippines will remain a great place to play and I will be back to visit. But not a great place to live if you want to maximize productivity. Everything is more inefficient.

China is not for most Westerners. Yes you need to learn how to work within their system which is a mix of lies, corruption, two-faced, backstabbing, but also erudite and productive. Did you see they built an entire building in a day?

South America is violent. But there are some good options there for citizenship. One doesn't need to live where they hold citizenship. One would want to study the future tax direction of that country though. Most Latin American countries are very socialist. Ecuador, Venezuela, Argentina, Brazil come to mind as being very socialist. Guatemala appears to be less so and more like the Philippines.

Below is a very good introduction to the concepts and consequences of fiat currency.
It's is somewhat introductory but well written and easy to understand it probably a good starting point for those just learning about the concept. Great coverage of the history of fiat currency in ancient times. I learned some historical facts that I did not know previously.

http://www.acting-man.com/?p=35965

CoinCube,

China can write down the debt because they have so much upside. Japan was already a first-world economy and had already maxed out. China is no where near maxed out, and is in fact highly retarded from its potential because of the Communist Party holding back the full capability of China's free market. All that top-down driven debt growth was focused on negative profit margin activity being driven by the corruption in the political system. The coming Minksy Moment correction will force radical openness in China and it's fully potential can be realized.

China isn't bankrupt in social capital as the West is. The population is still young enough (not as young as SE Asia, but not mostly retiring as the West is) and very erudite with strong family values and hard work ethic.

Also Chinese are naturally explorers and traders, unlike the Japanese who are insular and tyrants (and a very old population). Through trade instead of war, China is leveraging Africa, SE Asia, etc..

The West is decadent and the social capital is negative and everyone is entitled and overpriced.


There is a turbulent period coming for China wherein the people come to realize that what they've been doing doesn't work.

If China choose to tax and financially repress to prevent writing down the debt for 26 years as Japan did, then the Chinese standard of living will decline (and it is not that high yet), thus I think the Chinese peasants will riot and the system will have to change. The last major inflection point for China was when Deng embraced capitalism under a State model. This coming Minsky Moment should push China to make the shift to ending the State oppression. However during this transition, the State may try to make war with Japan as a scapegoat and to direct peasant angst towards nationalism. The Chinese are not as religiously nationalistic as the Japanese who whor(e)ship an Emperor. The Chinese spit and defecate along the road. Japanese are very conforming society and more like cats than the Chinese who are more like dogs. Japanese sip tea and have many formalities of social behavior. The Chinese gets things done any way they feel like it (did you read about them putting straw in the concrete to save money so the bridges collapsed, the Japanese would never do that!). China is a mainland held back from conquering the world by geography (Himalayan mountain range blocks projecting supply lines for war) and Japan is an island. Two different cultures arose from that differing geography.

Cross-posting from the Skycoin thread...


That is the bifurcation of the economy I was writing about in the Economic Devastation thread.

http://mobihealthnews.com/36874/the-evolution-of-ibms-watson-and-where-its-taking-healthcare/

http://armstrongeconomics.com/2015/02/21/doctors-lawyers-peaking-with-2015-75-the-crash-burn/


http://armstrongeconomics.com/2015/02/21/comment-from-the-medical-profession/

BTC

This is the highest paid advertisment ever on youtube.  They are pushing it to the tune of billions.  All fake of course like all advertisement.  Why?  The people who paid for this are the biggest fools in the world.  

...

CoinCube must be a banker with Goldman-Sachs, look, his reply number is 666...  

I have seen various figures for debt in China and Japan, it is hard to know which figures are "best" for examining their financial situation, so I will not go into that here.

Similarly for capital controls, a topic which I must leave for another rainy day.

*   *   *

The whole issue of "Plan B countries" is very complex, at least for Americans.  There are a slew of factors to be taken into account, and these factors have to be judged for each individual.

1)  Plan B countries among the "developed countries"?  Well, ahh, I don't know.  ALL of them have arguably MOAR problems than the USA.  Canada?  Europe?  Japan?  Australia/NZ?  None are convincing candidates for me.  Lots of debt, risk of authoritarian governments as bad or worse than the USA.  The weather in Canada and most of Europe is unattractive to me.

2a)  Rest of Asia?  Well, not for me.  The only candidate that comes to mind for me would be Singapore.  Reasonably free but disciplined.  Wealthy country that seems to be governed reasonably well with good .gov attitudes.  But, I have not been to Singapore.  I have been to Japan (twice), S. Korea and China.  I would feel very alien in any of those three countries.  I do not speak their languages (knowing the local language is almost required to live happily in any country IMO).

2b)  How about other places in Asia?  Author Robert Kaplan recently (2014) a book on geopolitics there in East Asia: Asia's Cauldron: The South China Sea and the End of a Stable Pacific.  Highly recommended.  He discusses (a chapter each, and yes, he went there) most of the major players there in E. Asia (not S. Korea and not Indonesia).  He liked Singapore and Malaysia.  He somewhat liked Vietnam and Taiwan.  He did not like the Philippines.  Re the Philippines, he did not like the excess corruption and poverty there that leave it so far behind their neighbors.  He did not much discuss China (other than their threat to "annex" the S. China Sea, which he discussed at length, the point of the book) but did mention some of their problems (pollution, Communism <--- which struck me as a big problem (for me) when I went, and their own Debt Bubble).  The fact that you must be connected to succeed in China is a big drawback for me (iamback).

*   *   *

So where would an OROBTC go?  Europe and all/most of Asia are not attractive.  Most of the developing world is not so great either (forget Africa, S. Asia, the Middle East and Central Asia).  Most "niche" countries would not work either (Iceland, Liechtenstein).  The Caribbean?  No.

For me, that leaves Latin America.  I speak Spanish, so there is some choice (but I do not speak Portuguese, so Brazil is out for me).  We have our company in Peru (as well as nice in-laws there), so Peru wins by default in my case.  Other places in LatAm might work: Costa Rica, Panama, Chile, Uruguay and even Paraguay might be OK.

Note that each person's likes & dislikes are very much a part of the complicated equation!  iamback referred to the relatively violent nature sometimes seen in LatAm society, and yes that too is a factor (especially street crime).  Also corruption.  Also the fact that a country today might seem just fine, but in 10 years not (Venezuela and Argentina are great lessons).

Why do you think China is not bankrupt? To me they look like Japan circa 1990

http://www.bloombergview.com/articles/2015-02-09/weak-china-import-figures-shouldn-t-spur-stimulus


The U.S. had a total debt-to-GDP ratio of about 260 per cent by the end of last year, while the U.K.'s ratio was at 277 per cent. Japan topped the world table at 415 per cent, according to Standard Chartered.

It is true that current (officially reported) government spending in china as a percent of GDP at 23.9% is much lower then the USA at 41.6% or Japan at 42% But the trend is climbing and climbing rapidly.






Back in 1990 before Japan turned down it's government spending as a percentage of GDP was around 30% the government spending climbed when the economy turned down.

CoinCube,

Japan is bankrupt so they will have to tax everything. China is not bankrupt, and everything the Communist Party does is for show, while the Communist Party members use Singapore to hide profits offshore. China will make a show of force but in reality 75% of what is being done will be free market. Asians say one thing to save face (and even to appease the G20), and do another thing to maximize profit. In China it won't be a completely transparent system, you have to know how to game the system. That is the way Asia works. It is strange concept for a Westerner to understand since we are so accustomed to transparency and openness of communication. What you think you see of China is not the real China. You would need to have many friends and relationships before you understand the real China and how to game the system in way that is unseen and unspoken.

IMO you have not provided any evidence to refute my assertion that capital controls will applied mostly to Westerners (and Japanese perhaps) but not to Asians because their societies are not bankrupt.

Btw, I could see European countries hunting down their expats for wealth confiscation because European countries are bankrupt.

Plan B countries are those societies (private and public finances and social capital, education levels, socialism levels, etc) that are not bankrupt and thus will not self-destruct taking their citizens down into the abyss.

Parents of US expats are already starting to not report the birth of their children to the USA.

http://blogs.wsj.com/expat/2015/02/18/when-american-expats-dont-want-their-kids-to-have-u-s-citizenship/





The USA may be the exception to the rule now but other countries are going to follow the example of the USA. Up next is China which will do the same. Eventually I suspect that all/most of the current bankrupt western and asian governments will go this way.

http://www.nytimes.com/2015/01/08/business/international/china-starts-enforcing-tax-law-for-citizens-working-abroad.html?_r=0


Japan is also likely to copy the USA. Right now they are focused on capital gains only but that will likely expand to include income in the near future.

http://www.scmp.com/news/asia/article/1636852/japan-targets-its-expat-tax-dodgers-big-apartments-and-yachts-hong-kong


This is not a USA problem it is a global trend. Plan B countries may become very hard to find.