Learn from Hong Kong’s Budget

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While Britain, the US, and most of the entire western world struggle, Hong Kong has more money than it knows what to do with.  By the end of this March, the local administration’s reserves are expected to balloon to £63 billion (US $94 B) or £9,000 per citizen.

Last week’s Hong Kong budget showed an embarrassing surplus of £5.56 billion for the year, despite the government giving every resident £514 (US$770) cash, high inter-structure expense and subsidizing electricity. And although Hong Kong is part of China, under the agreement between London and Beijing, it is run like a separate country.

cuttaxAlthough only the well-off pay any tax, to keep residents from marching against greed, the finance secretary pledged even lower taxes and more help for the poor and elderly.  Policies that western governments with their increasing squeeze couldn’t dream of.  The top rate of 17% income tax remains, but corporation tax is to be reduced from 17.5% to 10% for small companies.

centralbuildingsHong Kong is already the freest economy in the world, with no tax on goods or services, dividends, interest or capital gains. Only cigarettes and fuel attract revenue of significance – although transport costs a fraction of UK prices. Wine tax was abolished the other year, and a can of 5% beer can be brought in a shop for as low as £0.22 (US$0.33).

WealthThis wonder of economics, the envy of other countries, shows how faith in the free market with little meddling pays off.  No army to invade other lands or extremes of poverty or far-flung geographical regions helps. So does oriental family values and a hard-work and save culture.  Same for no debt attracting interest and a non-democratic regime without high social welfare helps.
taxmanOf course this is an over-simplification and the rise of Mainland China has made Hong Kong rich, but western economy could learn. In the 21st-century high tax doesn’t bring in money: it drives it abroad.

See my personal site at NigelHayMckay.com

 

 


Predictions for 2013

Old Moore’s Almanack

This little British book has been prophesising since 1697 – over 300-years. Like all forecasts, you can find whatever you’re looking for – that’s why they’re written vaguely!  However, at this time of year it’s captive reading.

As can be expected, it starts with finance, reminding that 2013 will be the sixth-year of economic turmoil. This is written in a positive note, predicting that we’re now 80% though the bad and will be clear of our “depressing correction” by September 2014.  More than another year to go, but at least the end is in sight.

Old Moore gives only a few clues to what may happen in 2013, but does forecast that there will be an upsurge in political extremism everywhere. In the US, the general mood will be increasingly confident, except for relationships with Europe and China being strained.

Britain will do better than the rest of Europe, and France will continue to live in a “state of denial”.  However, 2013 will “promote correction, revolution, rebirth and transformation” in Europe, although pressure will ease for Greece.

Not surprisingly it says to watch the Middle East and Pakistan, and that “radicalised religious leaders will become dangerously militant”.  There will also be some technological travel breakthrough in the UK around the middle of the year.

Chinese New Year 2013

February 10th 2013 starts the Chinese Year of the Water Snake. In the West the snake is associated with danger – however Eastern philosophy regards the snake as a symbol of good luck.

Historically, Snake Years brought correction. The Dragon Year of 2012 was full of vigour – the following China zodiac beast, the snake, sheds its skin and starts afresh. This will bring change to correct excess.

The Water Snake is particularly enquiring and money-orientated, and so will look for new ways around debt and the recession.

According to the Chinese zodiac, during a Snake Year you should be thrifty, save money and plan for the future. This year of change will attract scammers – so be careful!  It’s a good time to invest, but be wary in business deals or a new marriage. Stay focused and beware of complacency.

For more predictions of the Year of the Snake go to: http://www.mrbead.com/yearofthesnake.htm

See my personal site at NigelHayMckay.com


Bank of England to Print More Money – we’d be better with beads!

The Fall of Money – Buy Beads, Fast!       

Could today’s financial problems lead to abolition of currencies? Could beads once again be the main unit of exchange? 

The US already has over 15-trillion dollars national debt.  That’s 15 followed by 12 zeros, $15,000,000,000,000 – a 50% increase in 3-years (see it increase daily: http://www.brillig.com/debt_clock).  The Federal Reserve and Bank of England are already printing money.  This is start to the end of the system.

95% of all the money created is interest-bearing debt.  “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.” – Alan Greenspan – 1966.  Don’t be fooled by deflation propaganda – the US and Europe rely on imports and foreign-US dollar & Euro reserves.

Money should not necessarily take the form of sterling or dollars issued by the banks. Money is only a medium of exchange.  It could be anything, as long as users trust that everyone else recognizes its value.  

During the Great Depression, businesses in the US issued rabbit tails, seashells and wooden discs as currency.  In 1971, the mayor of Curitiba in Brazil, kick-started the city’s economy and solved two major social problems by issuing currency in the form of bus tokens. People earned them by sorting litter: thus cleaning the streets and acquiring the means to commute to work.

For thousands of years around the globe, beads have been used as a medium of trade. Three ancient shells recently re-found in a museum archive, may be the world’s oldest known beads.  Estimated to be over 100,000 years old and originally from Israel and Algeria, each has a hole made through its centre.  In China during the Zhou Dynasty, 1122-255 BC, they used bronze Chuan “beads” or “string” money.

Native Americans in California, used small disks shaped from sea shells strung in strings, each an exact diameter for counting.  As recent as the Middle Ages they used bracelets and necklaces to trade for other items.  However, the purpose of exchange was not to accumulate more than others, but to generate and strengthen social relationships.

In Thailand, seeds, bracelets and pebbles were used as a medium of exchange from 300 BC.  And in Africa, beads have been traded for thousands of years in the temples of Egypt, the markets of Morocco, and by the Nigerian Kings.  Beads played a big role in the European scramble for Africa.  In the 18th Century, African middlemen bartered beads for gold, incense, ivory and slaves. Between 1500 and 1867, 15-million African slaves were shipped to Europe and the Americas in exchange for a mere handful of beads. 

Roman eye-beads from Syria that were buried in the desert for over 2,000-years are today painstakingly dug out of the sand one-by-one by poor Africans.  Then traded with merchants in Mopti, who assemble a strand of several dozen for sale to collectors.

Perhaps your beads and the jewellery they make could become your most valuable asset.  Semi-precious beads and pearls are inflation proof, like gold and other limited resources.  So even if they don’t replace money, they’re an immediate purchase!  And if they do….

More on my personal site at NigelHayMckay.com

These are some great books on the subject: