Dan Mitchel explains cogently why US extra-territorial taxation penalizes American businesses and makes it impossible for them to compete on a level playing field with foreign companies. He doesn’t even touch on the subject of why US international taxation of individual US citizens living outside the borders of the United States. This penalizes American companies for hiring US citizens overseas, not to mention how it destroys the lives of US citizens abroad. On that, read Roger Conklin. Hat tip Isaac Brock Society.
Author: Petros
Mob rule in Dearborn
Free speech in America? If the mob attacks you, the police punish the victims. The police tells you that you are a threat to public safety.
Hat Tip: The American Thinker
The education bubble: Larry Summers quote
Zero Hedge writes, citing Larry Summers:
“The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending.” Larry Summers, source
It is only fitting that the sequel to what to a large majority of people is the dumbest quote in history, will once again come from Larry Summers:
“Rather than focusing on lowering already epically low rates, governments that enjoy such low borrowing costs can improve their creditworthiness by borrowing more not less.” Larry Summers, source.
I guess that Summers has never heard of debt to equity ratio. A strong debt to equity ratio is a crucial criterion in a creditworthiness equation; the problem with borrowing more is that the debt that greatly increases the numerator will at the same time decrease the denominator because: equity = assets minus liabilities (debt); debt/equity ratio = debt/assets-debt. Thus, the debt to equity ratio must necessarily increase, reducing the credit-worthiness of the entity.
Thus, mathematically speaking, the only way to increase creditworthiness is to increase assets without increasing liabilities. Deficit spending, in most cases, does the opposite–it increases debt without increasing assets, thus destroying the creditworthiness of the government.
What does this have to do with the education bubble? Larry Summers was president of Harvard University, the smartest university in the world, that produced such luminous graduates as George W. Bush and Barack Hussein Obama.
Out of the fry pan: on playing musical trading accounts (UPDATED)
Update: I am happy and relieved to say that the rest of my US positions have been moved now to TD Waterhouse. It is now only a matter of getting them to transfer any remaining dividends will be paid on the 15th of June. Also, I’ve learned the reason for Penson Worldwide’s financial woes: a bad bet on a horse race track.
(NB: I’ve started to see my final positions show from Questrade show up in my TD Waterhouse US funds account after I published this post–so good news. I’ve got my fingers crossed for now.)
In the Spring of 2011, when I was in the process of getting out of the United States tax system, my lawyer advised that I move my accounts out of TD Waterhouse into a company that had no holdings in the United States, as he thought the US could hold TD’s US assets as leverage against me. So I took his advice, and moved my bank accounts to a credit union and my investment accounts to Questrade, a Canadian only company. Thus, if things got nasty with FATCA, I would create distance between me and the United States. I wonder how many US laws I broke doing this.
Civil Forfeiture and Boiled Frogs
A cross post with the Isaac Brock Society:
Is it bad in Obama’s America? Yes it is, very bad. Monty Pelerin who wrote with me the article “When government turns predator“, has written another post, “Government Extends Its Tyrannical Role As Predator“, in which he features the question of civil forfeiture. Reading about this subject makes me wonder if God has put me in Canada for the same reason that he put Joseph in Egypt, “You intended it for evil but God intended it for good,” he said to his brothers who had sold him into slavery. For Joseph went to Egypt, and as a result, was able to save his entire family–his aged father and his brothers who hated him, their wives, children and all the servants in their households. Am I in Canada to be able to save my dear dad and my family from a crisis in the United States, when things go really bad there?
In any case, the question of civil forfeiture appeared in a George Will article, “When the looter is government”, which tells the story of man whose family business is being seized by the Justice Department. Such forfeiture is obviously a clear violation of the Fifth Amendment due process clause, but damn it, we are talking about the United States of America, a country which operates according to the rule of law, and that is why Stephen Dunn would never renounce his citizenship. Someone asked me yesterday whether Stephen should be added to our Hall of Shame. No, I think we need a new award–the Boiled Frog Award for American Panglosses that believe that the United States is the best of all worlds. Are you reading this WhoaIt’sSteve?
Monty linked to two videos and I offer them here below. The impression I have is that the rule of law has broken down at all levels. Not only can MF Global steal money out of client’s segregated accounts and the bankters can commit mortgage fraud with impunity, but now the local police get in on the act with absolute impunity. America as an ideal is over. America as a nightmare has only just begun. We who are living abroad are the lucky ones. I almost regret feeling so angry at Americans.
The Righteous Investor 