Zuckerberg's Big Deflation Savvy Donation?

These foundations are billionaires ways of avoiding wealth transfer, with a halo.  Usually in effect the billions are protected from confiscatory taxes and wealth transfer, and they are obliged to spend 5% a year, but these billionaires spend it on buying access to 10%-a-year investments, and they hire family members and congressmen's nieces (as part of what is "given away") so the power is in perpetuity.  We taxpayers maintain the cost of protecting the billionaires' assets.  But the newest member has created a foundation with a twist:

Zuckerberg added that he and his wife will receive no tax benefit from transferring their Facebook  FB 1.72%  shares (currently worth that whopping $45 billion) to their foundation. Rather, they will be on the hook for paying capital gains taxes when the LLC sells its shares. Had it been set up as a traditional foundation, they would have received a tax benefit.

When it sells?  It never will.  But never mind, the more interesting thing is what happens in a deflationary era (the next forty plus years) when the asset value is falling faster than the preferential deals billionaires get can cover the deficit?

If they are not obliged to spend 5% as an LLC, how will they increase the value, tax-exempt, over time?   It is something to contemplate what with deflation changing the nature of investments.

Tyler Durden takes his dishonesty apart from a  different angle.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Winds Heading Our Way

Are blowing through Greece first:

Cash “under the mattress” totaling more than 15,000 euro, jewelry and other valuable items such as diamonds and gemstones, should be declared to electronic system of tax authorities, Taxisnet, as of 1 January 2016. Next to properties and vehicles and shares, now the taxpayers will also have to declare their deposits. And not only that. They will have to fill if they rent bank lockers and if yes, also the name of the bank and the branch, even if abroad.

Your best best for asset-protection is have it in the form of accounts receivable out to man customer...  in essence you have your assets in laddred bond investments inder your control that are so high and far between as fruit on the tree thye will never get around to you.  This is another reason th hegemon so hates small business (get big or get out!)

Start your busines now.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Will they Pay You to Take a Mortgage?

Euribor, to which euro mortgages are linked, has hit a new low.  So the question will arise, will the time come when the bank pays you to take a mortgage?  This is not farfetched.

Think about it.  In the next crack-up, the banks will be stuck with bank owned properties on the books at a nominal value of say $250,000.

But we are in deflationary times, so the value of assets will be dropping.  So say now the house payment is $1200 per month at 4% interest... over thirty years that is about $175,000 interest paid on the loan.

Now in deflation you have to think the other direction.  At 4% deflation over thirty years the value of the $250,000 asset, the house is dropping, in monetary terms.

By charging zero interest, the bank has an asset on its books, and it getting its money back from a safe credit bet, you.  You pay about $695 a month for 30 years. Also the longer you take to pay, the harder the currency with which you pay, the happier the bank is.

So zero makes sense, but how about the bank paying you to take a loan?

It will happen.  The gimmick is you will take a loan at zero interest rate, and the bank will "pay you" the difference in deflationary interest say $200 a month, so you net out $495 per month in house payments.

Of course you'll be agreeing to a house at $250,000 when the cash price is more like $200,000, but there will be credit foolish buyers aplenty to take this lousy deal.  You'll also be paying property taxes on the nominal $250,000 valuation, a 20% premium on your property taxes, in an era when those taxes will be rising.

Of course the banks will start with other freebies first, toasters, homeowners insurance, "skip a payment" plans, 10,000 psychological blandishments before they get to hard cash.

Get away from credit completely, cash will be king, and property, paychecks and pensions will be forfeit.  Get self-employed.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Colloquy on Gold as Money

For some reason a post announcing a seminar becomes a colloquy on gold as money -

Anonymous said...In what way is gold less of a tally? It is a commodity but what practical use does it have. Its a piece of metal after all. There is no absolute or universal value as far as I see it. I just want a medium of exchange, that is all, that isnt controller by a central authority. Is that too much to ask for?

In no way is gold a tally at all.  Gold is money, not a tally.

The practical use of gold primarily is a conductor of electricity in industrial applications, and for silver, it is development of photographs.  Of course each has many other practical applications, which make it always and everywhere valuable in its own right.  The value is universal, but as to absolute, well the value is relative, as in anything else.  We all badly want that first beer, but when the thirst is slaked, that 4th beer is not so valuable.  That is no reflection on beer, just a reflection on its' perfidious devotees.

You contradict yourself when say you want only a medium of exchange, and in the same sentence want it also not controlled by a central authority.  OK.  Gold, and the price thereof, is not controlled by any authority, which is why it is hated by all central authority, and only by law is the good money (gold) driven out by the bad, legal tender currency (copenicus's law, or gresham's law).

No one would use gold to buy a house, as money, when you can use federal reserve notes, monopoly currency, to acquire the same rights.  Why use perfectly good money when sellers will take fiat currency?  Same with a good plate of beef chow yuk. Or a car.

Now, you may not really care one way or another for a medium of exchange, perhaps what is really missing is benecredit.  Especially as we head into deflation, the self (customer) employed who have their assets tied up as credit extended to customers are going to be in the best position for the next forty years.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

The DTSA

Here is another call for more rent seeking around "IPR"

The DTSA is sorely needed to fill a gap in remedies available to U.S. businesses that now operate in an information-based, globalized economy. This is one of those instances where federal structures are required to address a critical set of interstate and international problems.

My goodness, when the law does not suffice, why, make more law!  It could not be that this is rent-seeking on top of rent-seeking? Does it occur to anyone to serve the customers, instead of protect the monopoly?  We all love a system that works for us, but what about everyone who is harmed?  Read Patry on copyrights, and Boldrin and Levine on "IPR"... time to end the rent-seeking.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

World Trade Gravity Shift in Time

Visuals are fun, here one traces the shift in  "gravity" of world trade:

A research note from Deutsche Bank analysts this week explains how the "gravity" of global trade has tipped towards China over just a 10-year period.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Import Export Start-up Boot Camp San Francisco December 5, 2015

Hong Kong has one allowed gambling event, horse-racing and the profits feed charity.  So when an article talks about Hong Kong's "pole position" it is from horse racing and means best placed to do something.  China plans to develop the Eurasian land-mass economy, a process abbreviated as the "belt and road" initiative, after the main trade routes anticipated.  

Here is what top Hong Kong people have to say:

Opening new markets would deliver opportunities to Hong Kong’s next generation of entrepreneurs and SMEs, who would use their initiative to create opportunities, said Victor Fung, Chairman of the Fung Group.
“That [the Belt and Road Initiative] is going to generate our next generation of SMEs. That is what’s going to deliver the next generation of forward movement and thrust for Hong Kong,” said Mr Fung.

Hong Kong is a trade center.  It makes almost nothing and has no resources.  But with 30% of business visas to USA denied (people trying to visit USA to buy or sell) Hong Kong denies nearly zero (if a visa is even required.)  If you want to sell to say France, Hong Kong is not a bad place to visit.  If you want to sell to France, Chile, Montenegro, and Mali, Hong Kong is the best place to visit.

If you need to grow export sales for food, either as a producer (principal) or an agent of producers, please join the others who will be attending an all-day food export seminar in San Francisco, Saturday, December 5, 2015, from 9am to 5pm.  Don't waste time and money blindly searching, go straight at buyers with what they need.  You'll learn the tools, tactics and attitude.

If you are in the Bay Area these seminars offer boot-camp start-up experience and time to get specific questions answered.  If you are not in the Bay Area, this is the one for which you should fly in.

You'll learn to identify markets and sources, and everything in between.  If you plan to start up a business, or need to expand your business internationally, this seminar is unique for its tactics and attitude.  It is highly rated for content, pace and humor by the participants.

Bring a laptop, we'll be taking actions in the classroom to advance your business (wifi provided.)   There is plenty of follow-up consultation with the instructor.  You leave with tools, tactic and attitude, and special info on Hong Kong, you'll find no where else.

Register now to secure your place in the class.  This one actually has Berkeley credit associated with the course, .8 of a CEU, which means if you are pursuing a degree the seminar goes on your transcript, if you want that too, and your employer is likely to cover the cost in your company education benefit program.

Email me if you have any questions.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

A New Hong Kong in Hawaii?

It ran into trouble, but this seems to be gaining momentum:

The state of Hawaii, with strong support from the federal Department of the Interior, favors a plan to create a new entity, something like an Indian tribe, that would give those who can show Hawaiian ancestry the right of self-determination, leading to the status of a sovereign nation.

The Puyallup Indians have a seaport and airport already on their territory.  If at first you don't secede, try try again.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post