Thursday, March 21, 2013

Cyprus: The German Checkmate

Cyprus: The German Checkmate

Many talking heads have not slept a wink or a minute in their effort to wax endlessly on the Cyprus conundrum . They point out endlessly that this could lead to runs on the banks throughout southern Europe and that this would hit Russian money the most.

In truth, I say to you, listen not to these useful fools of the Prince of Lies. While they give you a few ounces of truth, they sell you tons of lies to lead you into the fog and away from the truth of what you are witnessing and it is something much much worse than what they are proposing.

The truth of this move by Brussels, in other words by the Franco-Prussian alliance, is much more sinister and much more Byzantine. Let us explore.

We are told that the majority of the money here is Russian. That is not the truth. Russian monies are over $40 billion but are mostly tied to companies not individuals, though those are not in short supply either, but the biggest investors are the British who have over $120 billion in Cyprus. So on one level this a Eurobank move to close down a perfect off shore and push out not only the external competitor Russia but also the more dangerous internal competitor the UK. 

For Russia, in all truth, this is not a disaster, it is a small gift, though it was never meant to be such. President Putin has long been talking about repatriating the various off shore funds, however, no one knew how to do it. Enter the Franco-Prussians.

Russia is not react loudly not because it is weak or because some oligarchs are taking out hits on EU officials, though this last can not be rules out when people lose hundreds of millions of dollars to government and banker thieves.  Contrare, the Russian government is quite happy with this theft and the higher corporate taxes. While not all the money will return, a large portion will and the outflow to Cyprus and the rest of Europe, which can equally be hit with the same out and out theft, will slow. Indeed Europeans will look to Russia as well as the usual US and UK safe havens. 

On top of this, Russia is now seen as the hero and Orthodox brother of Cyprus for its various loans and the EU and the Germans in particular, as the enemy. The crowds standing outside the Cypriot parliament are waving Russian flags.

A win-win for a relatively small price.

For the Uk, this is only a lose lose as the Franco-Prussians out maneuver them and drive them further out of Europe and thus devaluing the cause of Anglo finance. That the British will seek revenge is a given. That revenge will not be hit contracts, what it will be is the traditional British role in the world. As the UK gets further and further pushed out of direct European politics, they will take up their usual role of spoiler of the peace. The British will move to create strife and cause war.

As for Cyprus, they are screwed regardless. By simply bringing this up for actual and realistic consideration, they have done unrepairable damage to their reputation that will take decades to fix, even as they have refused this blackmail. Of course the vote against was only the first battle and the EU is not done with them yet. Their economy, already damaged is now ruined, and thats exactly how the Franco-Prussians want it.

The roots of their evil runs much much deeper than just theft of bank accounts.

By destroying the credibility of Cyprus, through their puppets, they are making sure that Cyprus will be in to weak a position to grow and profit from the bonanza of gas wealth that is just now being developed. By driving the government and the economy into total ruin, the Franco-Prussians are making sure that they will be in position to become masters of that wealth. They will then attempt to route that gas to themselves and the Turks, thus further driving out the British and their North Seas gas and the Russians from the European market, while making trillions off of their own people.

Further, by leaving the door open to further grabs of depositor cash throughout Southern Europe, they are absolutely guaranteeing bank runs and collapse. But why.

Quite simple, actually.

What they are creating is absolute Ruin in the PIIGS and this is what is desired. The next round of credits will be more of the Greek variety, where Brussels, as the agent of the Franco-Prussians, will take full financial control of those nations, turning them into nothing more than vassals of the reborn Charmlamainian Empire, otherwise known as the Holy Roman Empire,  mark two.

What they are doing is building Fortress Europe, first financially and than soon militarily. The military will be in the guise of keeping peace in the vassal states. They are pushing us Russians, as well as the British, Americans and Chinese out to create their own monopoly, the desires of the slave people's be damned.

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Friday, March 15, 2013

London, an Interesting But Disturbing Place

Recently, dear readers, I visited London, with my family, on a short vacation. It has been some decade since the last time I was there and then it was only for a short business trip.

London is an interesting place, with much to do and much of it at a pretty pence, and some very disturbing issues. I'll skip the tourist's guide, as you can find that on just about any place and concentrate on the things I found interesting/difficult.

First, was the ride in a taxi. We rode to the real estate office to sign paper work to rent an apartment (much cheaper than having a hotel room and in city center and much larger than your average hotel suite) and then to the apartment building. All total: £120 or $180! For that amount of money, I can rent a taxi in Moscow for 1 to 1.5 days. Literally, to ride from any of Moscow's airports to the city center, it would cost me about 2000-3000 rubles, or about $60-100 and that is regardless of how long it takes. Our ride was going up by 10 pence every 10 seconds!

Than there is the London famous Tube. Wow, what a shock. We can start by the absolutely chaotic entry area, where its hard to figure out who's coming in, who's coming out and where to buy tickets and for what. In London there are three different fares, based on from where you are coming from and to where you are heading. There is a special frequent riders card, which is broken down to peak rides and off peak rides, though its not always a price difference and depends how far you are riding. So, we had one train station, switch lines and four more stations. Cost per adult? Two pounds on the card. Two pounds sterling, that is 3 USD, or 91 rubles. So, if you have the card, a short ride on Tube will cost the same as 6 rides on the Moscow metro and on the Moscow metro you can go from one end to the other or just ride around all day and to all the stations and its one entry cost.

We did not have the card, obviously, so our ride was £4.50  per ride. That's 6.75 USD or about 200 rubles or enough for 20 rides on the Moscow the British, the average Londoner make 20 times the same as a Moscovite? Hardly. The average Moscow salary now stands at $2,000/month, or $24,000 and with a 13% tax rate, that means the average Moscovite keeps $20,880 in his pocket, per year. The average Londoner has a salary of £35,000 or $52,500 and with a top tax rate of 45%, has an average of 20% for the majority. So at 20%, that means the average person keeps $42,000 or just a bit over twice the Russian amount. So, while making just twice what the average Moscovite makes, a Londoner must pay (assuming he has a frequent rider card and is not on peak hours and not going far) five times what a Moscovite pays to go to work and home. At least children under 11 ride for free.

Thankfully, on the second day, when I was buying tickets, the cashier explained about getting a one week all you want to ride pass, for £35 each adult. Ok, so that is 1,575p, or enough to ride the Moscow metro 62 times (also you can ride buses and trams off of the same ticket, in Moscow).

The Tube's map is a spaghetti nightmare and depending on what routes you are taking some maps have them as one colour and others as another. It took me 10 minutes to find our way around on the map. 

There are no doors on the entry stations to the Tube, so the cold wind of winter blows through and down the narrow tunnels and stairs and so the whole of the place is windy and often quite cold.

On the bright side, London has a lot more stations than Moscow, however, it is obviously that they went for quantity over quality. Even the newly built stations in Moscow, which are drab compared to the Moscow central stations, are luxurious by the standards of the Tube.

Ok, off we go under ground: narrow passage ways, as opposed to the wide Moscow ones. Bland walls, with some green and other colour tiles. The trains arrive on time, at least, like ours, unlike say the NYC subway, which unlike the Metro or the Tube arrives as it feels like. Anyways, I digress, so we get on, or rather fight our way on. You see, only the central door is double, the doors on either end are single and narrow by that margin and people are trying to get on and off. Try getting on with a small child, it is a nightmare. The train itself, is also narrow. The Russian wagons do not look as sleek and sophisticated, but they are comfortable and wide, the cadellacs of  metro cars.

One last thing, there are bums sleeping in the metro and as many bums and homeless begging on the streets as there are in Moscow. That was shocking in the financial capital of the world, London....

Third thing: there were hardly any British working anywhere in London. From the German woman who ran the real estate office, to the Scottish driver, to the French girl selling me and mine tickets to the London Eye (worth going on by the way, even if quite a bit expense, at some £26/rider), to the Romanian waiters or the Italian retailers. Quite literaly, there were hardly any English, working anywhere in London. And the British unemployment rate is? Why 8% and I am sure that is under reported. Heck, I like the British accent and was looking forward to hearing it, what a surprise, I hardly did.

Fourth, the amount of non-white neighborhoods in London central. I know there's regions around London, just like around Paris, where white British is an endangered beast, but in central London? We passed several, riding in the taxi and I started counting. At one point, I got as many as 20 blacks before I saw one white and I have no way to know if she was British. Wow, things have changed incredibly in a decade.

And the toilets...why are all the toilets so bloody cold? You are in some warm restaurant and walk into the leu and its bloody cold. Public toilets are cold, that is one thing, but the private ones too?

I will finish on a positive note. The merchants, both the few English and others, were much more friendly and customer centric than our own in Moscow.  So were the people generally on the streets and in the metro. That is a talent that most of our own have yet to pickup. See, I am a positive person.

Wednesday, March 6, 2013

Does High Minimal Wage Make a Country Rich?

Does High Minimal Wage Make a Country Rich?
The Left leaning English daily, Moscow Times, published an article aimed to once again show the negativity of Russia. This is their standard operating procedure, to always at any opportunity, humiliate their own country and do it in a foreign language. They pander non stop to any enemy and make excuses for any slight to Russia or Russians, a wave of the so called "intelligentsia" whose predecessors gave us the Revolution and who themselves were first to flee their Frankenstein.
But I degrees.
Now back to the topic at hand. As with all Leftists, there is ever a very shallow understanding of economics involved. The Moscow Times correspondent goes to great lengths to point out that Russia has the third lowest minimum wage rate in Europe, in USD $223 (70% of subsistence level), while the European average wage is $823 and the American is $1,340. Of course, right off the bat, one notices that the article ignores giving the wage's percent of subsistence levels in Europe and the US. Why so? Mayhap this will not paint such a pretty picture?
First, lets keep in mind that only 20% of the Russian population lives below the poverty line, which makes Russia on par about average with the West. In the US, the official statistic is 16% (from the supposed richest nation in the world) and in the EU poverty levels vary from 9-28%, the median being 16.4%. There are two trends that should be viewed, however: 1. the average wages in the West are falling and falling rapidly. January saw the biggest drop in US wages, with a decrease of 3.6% and the poverty level is surging up, with 49 million Americans on food vouchers. Europe is in a similar boat in most nations, with over 1/3rd of Greeks alone already dependent on government handouts for daily survival. In Russia, 2012 saw a salary rise of 10-13% in the secondary cities and a 15% rise in Moscow and St.Petersburg, while inflation was around 7.5%, thus salaries are rising well ahead of inflation.
Now, lets look a bit closer at the minimum wage debate and its effects on the economies. Doing a little research, one comes up with the following statistics: the poverty income level in the US is considered $11,170, so the minimum wage at $16,080 is actually 144% of subsistence level. In the EU, the average poverty income level is considered 6,000 Euros or around $7,300 USD. With an average minimum wage of $823, that's $9,876 or 135% of subsistence levels.
Looking at just the snap shot, we Russians look vulgar and poor, and yet the economic indicators, such as income growth, poverty rates and debt (Russia's national debt is $48 billion out of a $1,6 trillion economy (about 3%), vs European and American debt levels of 80-200% of debt (nation dependent, Germany being the lowest and Italy the highest and the US in the middle) would indicate that high minimum wage levels are not a positive force.
Indeed, in all sense, all Western nations (and Japan included), that is all the G7 of the G8 are broke. As such, one must recognize that minimum wage and especially, high minimum wage has a negative impact over all on the economic growth of society. Sure this may sound counter intuitive but it is not. Minimum wage is a hidden tax on business and in this case, on small and medium business. Large businesses already pay above minimum wage, on average.
Why is this significant? The majority of the population is normally employed in small and medium businesses not in the large and super large (usually transnational) corporations. Equally, most of the new technology and new products come from the smaller sized layers and are eventually bought up by the larger sized businesses. But often enough, the smaller businesses grow and create new and serious competition to the larger businesses. However, the reason for large and mega corporations supporting something like an increase in minimum wage, when they already pay over it, is simple: a direct impact on up and coming competitors, which lowers the threat to them.
But why does this hurt the average minimum wage worker and the rest of the middle class and specifically lower class society? The reason for the decline in socio-economic standings is simple enough: a higher minimum wage is good for employees, those employees who get to keep their jobs and at the same number of hours, however, quite a few will be either down sized in hours or laid off to cover the higher wages of others. Further, this cuts into investment spending and growth. In a growing market, at least part of this can be passed on to consumers through higher prices, which of course then continues to trickle down and deprive the poorest of purchasing power. Yes, its a circular process that does hurt the very people targeted for help with the increase. However, when the market is already shrinking, inflation: wage and thus product/service cost, is not the correct way out.
Right now there is a typical Keynes approach in the Americas and EU, to the crisis of growing poverty and we should look at the analysis that is coming out of it. The drive is to raise minimum wage to supposibily increase wealth of society and cut down on the middle class. Typical leftist Keynes approach and as typically ignorant or ignoring the repeating evidence of policy failure. This interview from the American addition of Voice of Russia, sums this up nicely Analyst: Raising Minimum Wage Will Force Small Businesses to Lay Off Employees
Thus, once again, instead of deciding with emotions, as is common with the Left, let us look at actual economic results of previous programs and not be influenced by Western backed, Leftist media to follow the Western Pipers down the road to economic self destruction.

Saturday, March 2, 2013

Actions Have Consequences

Actions Have Consequences
Enter stage left, one US Republican Senator Chris Smith. Mr Smith, a life long American power broker, who has been in his seat of excess and luxury for 32 years, seems to have forgotten that, at least outside the US, actions have consequences.
A loud mouth anti-Russian, who has called numerous times for Russia's expulsion from the G8 and who, by co-authoring the American 2002 law "On Democracy in Russia Act" has actively broken Russian law by helping pour American money into the coffers of preferred Russian politicians, has finally taken the last steps. Sure, its never enough to meddle in Russian politics through third parties, such as by giving foreign money to Russian political parties (thank God this is legal in the US, because after all, if it was not, someone, somewhere might accuse Mr. Smith of being a hypocritical and corrupt.), so Mr. Smith was an active supporter of the US Magnitsky Bill that denies visas and such and confiscates property of Russian politicians and others. Others, because that law is not limited to only the Magnitsky case, which itself is internal Russian business, but is written as "human rights abusers". Heck, if we fit that definition to the US, most American police would be denied visas into America, as well as a president who gave himself the right to murder his own citizens, without trial or evidence (even Stalin had show trials), as long as they are outside the US at the moment of their demise.
Well, off goes Mr. Smith to Moscow, or so he thought. However, actions have consequences and one was him getting denied a visa. "This is the first time (he was denied)," he stated to Foreign Policy magazine. "I was shocked. During the worst days of the Soviet Union, I went there repeatedly."
Yes, how dare the stupid Russians play the game of sovereignty to an imperial American creature of Congress? How dare I say?!?
And why was he heading to Russia? Why to discuss Russia's reaction to the Magnitsky Act. I am sure he was going to tell us to put up a stiff upper lip and take it on the chin, like good vassals. You know, like the way the British, French and Germans take every.
Sure, in America a creature of Congress has power, luxury and the ability to say, do and get bribed to any degree, to boldly break all tax laws, and just be as crooked as a country road, without a single issue. However, they forget that outside of the District of Corruption and the rest of the Americas, the world works by other laws. Consider this, Mr. Smith, a lesson learned.