Robin Hood in reverse

Things seem to be getting bigger and bigger every day in the modern world – in fact, it’s increasingly assumed that unless you’re a big country you have no chance in the global economy. Consequently, when looking at a map of the world, people often wonder how small countries like Luxembourg, Lichtenstein, Jersey, and various islands in the Caribbean can keep on existing in this cut-throat world, with such small populations and no natural resources. The answer in many cases is through tax – not the tax of their own citizens, but that from other countries. Many of the smaller nations of the world have become what is known as ‘tax havens’.

Tax havens are like a reverse version of the famous character Robin Hood. While Robin stole from the rich and gave to the poor, the tax havens essentially take money away from the poor and give it to the rich. They operate in this way: rich people in larger countries like the US, UK, France, or Germany would normally have to pay a reasonable amount of their money in tax. This tax would be used to pay for hospitals, schools, and other services for the poorer people of the country, helping everyone to survive. But the rich instead move their money to a tax haven, where they often pay a tax of only 1-2%. The amount of money this raises is more than enough for the citizens of, say, Lichtenstein. But it means the rich people get to keep more of their money, rather than helping their fellow citizens.

Many tax havens are also known for their secrecy – after all, the rich do not want their home countries to find out about how much money they have, in case they insist that they pay their fair share of taxes. The secrecy of the banks in tax haven countries (most famously in Switzerland) is often exploited by corrupt leaders in developing nations, who take aid money and developmental loans and deposit the money in their own account rather than using it to help their people as intended. This has been a major factor in the debt crisis that places like Africa are in – the money still needs to be paid back by the citizens, even though their leaders have stolen it and placed it in tax havens.

In the UK, whenever it is suggested that taxes should be raised on the richest people to help pay for public services, the media will argue that such policies will end with the rich leaving the country and taking their money with them. In truth, their money is mostly already gone, it’s in Switzerland and Luxembourg and the Cayman Islands, where they can avoid paying any tax at all.

What is needed is concerted action from all of the countries of the world to shut down these tax havens by ostracizing them from the world economy until they agree to play by the same rules as the rest of us. This has already started to work with Switzerland, which was always the most vulnerable to pressure because it does not only depend on the income from its tax haven status. Legislation is now being put in place for Swiss banks to disclose information to US authorities to ensure the correct tax is being paid. Now we need to place the same pressure on smaller tax havens, while also offering help with diversifying their economies towards more useful and productive work. The rich will oppose it, because the current arrangement works in their favor – but we must ignore their self-interested claims and realize that by shutting down the havens we can ensure that tax  money is used to pay for services rather than for yachts.

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An economic time bomb lurks under the icecaps

According to a joint-study conducted by a group of polar scientist and economists, the melting icecaps could prompt an “economic time bomb” to go off, costing the global economy TRILLIONS of dollars.

The common theory for the last two decades has been that melting icecaps would result in an economic “boom” of another kind. Companies would finally be able to exploit untapped reservoirs of natural gas and crude oil which had been trapped underneath thick sheaths of ice for centuries.

The Arctic ice, which melts and refreezes on an annual basis, is shrinking at an unheralded rate. Last year, “it collapsed to under 3.5m sqkm by mid-September, just 40% of its usual extent in the 1970s”. And since the ice is also becoming less thick, some scientists predict the Arctic Ocean will be largely free of summer ice by the end of the decade.

The growing concern is that, as the icecaps melt, the warming of the sea water will trigger offshore permafrost to release greater quantities of methane. “A giant reservoir of the greenhouse gas, in the form of gas hydrates on the East Siberian Arctic Shelf (ESAS), could be emitted, either slowly or catastrophically fast over a shorter time frame,” the researchers claim. “And that could result in “a $60 TRILLION global price tag.”

"This massive methane boost will have major implications for global economies and societies. Much of those costs would be borne by developing countries in the form of extreme weather, flooding and impacts on health and agricultural production," says Professor Peter Wadhams of Cambridge University, one of the authors of the study.

The poorer economies of Africa, Asia, and South America are expected to be impacted the most by all this. But since we live in a global economy, like a stone cast into a pond – the ripple effects can stretch across oceans.

"Neither the World Economic Forum nor the International Monetary Fund currently recognize the economic danger of Arctic change. [They must] pay much more attention to this invisible time-bomb. The impacts of just one [giant "pulse" of methane] approaches the $70-tn value of the world economy in 2012,” says Professor Gail Whiteman of the Rotterdam School of Management, another author involved in the study.

Shipping companies are preparing to deploy a record number of vessels across the north of Russia later this year in order to tap into the natural gas and oil preserves. The new Northern Sea Route uses the Bering Strait between Siberia and Alaska and is only passable a few months out of the year with an icebreaker. This shorted trip slashes travel costs up to 40%!

It’s only a matter of time until one of the drilling operations opens up a massive pocket of methane gas and releases the “pulse” scientists are waiting for.

NRGLab would prefer if we didn’t have to trek all the way up to the artic for a fuel that could wind up costing us TRILLIONS in oversight. That’s why we’ve developed a number of alternative energy programs that are not only cost-effective, but renewable and reliable as well. For more information on NRGLab, visit nrglab.asia.

Our fading trust in banks

It took centuries for banks to earn the public’s trust. It took just a few hours to destroy it. After the recent “confiscatory reform” in Cyprus, trust in the banking system is expected to be lost for the foreseeable future. A bank can have a beautiful office and highly-qualified personnel, sure. Its activity, however, can be no different from street vendors in Manhattan. And who would trust those hucksters with valuables for safekeeping? No one, that's who.

Financial experts have convinced us that banks are the safest and most stable means of monetary protection. During World War II, banks positioned themselves as “knights without fear" that were "above reproach." Today, it’s obvious that banks were unknowingly used to plug holes in a sinking, pot-marked economy. The issuance of the Cyprus directive by the European Union was a public demonstration that the trouble is far from over. On the contrary – the crisis is worsening. And now, the reputation of the entire banking system is at stake.

Following the confiscatory reform in Cyprus, one thing is clear: bank deposits are no longer safe, long-term assets. That means we need to find an alternative source of investment. How about low-cost energy? Data supports the theory that in order to sustain wealth, one must have some sort of share in power production. After all - the demand for energy isn't expected to dwindle any time soon.

The on-going financial crisis threatens Western bankers who have grown their “armies” significantly over the past thirty years. Huge profits were made on new financial technology. Due to this market success, the number of bankers rose drastically. Their level of professionalism, however, did not. (If anything, it decreased!) The “sword of the crisis”  will most likely slay a number of players in the banking industry, slashing the overall number of bankers. (5-10 for every 1,000 currently employed) These individuals can be old or young. Seasoned or inexperienced. When dealing with money, all types can be confiscated.


In the meantime, bankers refuse to offer any constructive solutions, save distancing themselves from everyone and ignoring council in order to plead ignorance. There’s a growing fear amidst the banking industry, and their only hope lies in keeping the capital secure. Not only is there mistrust in the current system, there’s also a prevailing, desperate desire to maintain the status quo. People are afraid of change. (Especially those who risk losing money, power, their reputation, or a combination of all three) Yet everyone pretends that NOTHING has changed. That the economy is fine. That the sky is green! But we're all being deceived. Meanwhile, the crisis continues to escalate and the threat of global economic collapse seems more and more real with each passing day. Will bankers be able to adapt and react to fluctuations in the market? It seems unlikely, since they view outside ideas as foreign and useless.

The portrait of the future is bleak. Irrational public optimism in the banking system only turns a blind eye, allowing the situation to worsen. The direr the straights, the more resistant banks become to admitting responsibility. The less open they are to change. One should expect the optimism from all the economic TV advisers to continue – up until the day the banks lose all of our money. Needless to say, when that day comes, the consequences will be tragic.

As American founding father and President Thomas Jefferson once said: “Absolute power corrupts absolutely.” It’s time to take the power back from the banks. Back from the bankers. It’s time for an alternative source of monetary investment. An alternative source of energy. Before it's too late...