Tag Archives: Free Market

Mar 5 2018

GDPR – Are You Ready?


Armstrong Economics Blog/European Union

Re-Posted Mar 5, 2018 by Martin Armstrong

The new so-called “General Data Protection Regulation” (GDPR) of the EU goes into full force on May 25, 2018. GDPR is a serious measure which is really designed to stem any criticism of the EU Commission. The claimed purpose is to stop propaganda pretending this will boost consumer confidence, revive the economy and generate billions of dollars in savings. What this is all about is the plain fact that this regulation will lay the foundation establishing a new layer of bureaucracy pretending to protect citizens but will burden the private sector since there are no specific injuries that are defined in advance leaving the enforcement arbitrary in the hands of bureaucrats at their discretion.

Across all of Europe, nobody understands exactly what is allowed and what is forbidden, who has to take what action, but the penalties of up to €20 million or 4% of your annual turnover are shocking. If you violate these uncertain rules when using personal data who can find yourself charged for simply doing normal business. This new EU regulation provides for a major threat to all companies in every field without exception. It appears to be clandestinely intended to be a revenue-raising tool that is just undefined. This regulation could be the straw that breaks the back of public patience and economic development in Europe. So far, such actions were always directed against individual industries such as the banks, which everyone else ignored since it was not their pocket being hit. This submissiveness unfolded more like the famous saying of Martin Niemoller (1892-1984) how the Nazi came for each group one at a time and nobody said anything until it was their turn and there was nobody left to ask for help.

Nobody knows if it is even okay to congratulate a customer on a birthday. If you can only send one e-mail to people who have expressly agreed in advance, can you send any sort of greeting even for Christmas? You are not allowed to send these persons any suitable e-mail or ask them for authorization by phone. A letter with a request for permission to send an e-mail is permitted. Lawyers cannot interpret exceptions in the vague formulations for even that will be just opinions that vary from one lawyer to the next. Everyone wants, everyone needs clarity but it does not exist!

This legislation is akin to the Writs of Assistance entered by King George III, which sparked the American Revolution. The defending lawyer against the King’s Writs of Assistance was James Otis (1725-1783) who pronounced these writs were “the worst instrument of arbitrary power, the most destructive of English liberty, and the fundamental principles of law, that ever was found in an English law book.” Otis warned that the king placed discretion in the hands of every agent to act as he desired. Nothing has changed for the government can do whatever it desires today and it is always the burden of the citizen to prove he has any rights whatsoever.

The EU has created the very same type of act. Allowing penalties to be imposed at the discretion of government agents without any clearly defined law is extremely arbitrary. The only thing truly defined are the penalties which can be up to €20 million Euros or 4% of the gross turnover of any business. Government agencies such as the judiciary, the police, the financial and intelligence services enjoy a special status, naturally.

Lawyers cannot even agree on whether the sending of an email by a company to a person is allowed or not for a birthday or holiday. Does there have to be prior consent to receiving an email? Some lawyers have warned that you may not be able to even send an email to ask for permission to send one. A company who sends unwanted emails commits a punishable violation of the regulation. Simply requiring to have an “unsubscribe” feature fails to comply with the law.

There are the countless emails we all get from Nigeria promising you are now a multi-millionaire just send your personal details so they can clean out your account. Just how is an EU regulation going to be applied overseas? Can a company that bombards people with emails constantly every day just because they look at their site but did not buy anything could be charged in Europe even if they are sending them from the USA. There is such a thing as territorial jurisdiction, but then again there is also extradition agreements. It appears that legitimate businesses will be hunted and fined for just doing commerce. The pretend emails that are criminally intended to grab your money or hold your computer for ransom will never be caught in the process.

The entire basis of Microsoft Windows is to push advertising and to take your surfing the net without any warning they are doing it. The latest Windows version was interesting. We turned off auto-update and two separate computers crashed at the same time and forced a reboot and then took 30 minutes to install updates. This seems that you cannot even opt-out even if you pay for the Pro Version. The vagueness of this law could actually call into question Windows when it is up to the discretion of an agent.

BTW – we do not sell anyone’s names, we do not send endless solicitations every day, anything we send as to notices of posts you must subscribe to for free.

Mar 5 2018

Germany Gets a Grand Coalition


Armstrong Economics Blog/European Union

Re-Posted Mar 5, 2018 by Martin Armstrong

The SPD members voted by a two-thirds majority for their party’s entry into a renewed grand coalition. The acting Social Democrats (SPD) party leader Olaf Scholz came out and said: “We now have clarity: The SPD will enter the next federal government.” The SPD had no choice. The polls showed if they returned and put it to an election, they would lose to the rising right-wing. Germany will move into a grand coalition but it truly lacks the majority support of the German people. This means that political unrest in Germany will continue to rise.

Chancellor Angela Merkel finally reached a deal this past Wednesday to form a new German grand coalition government by handing the powerful finance ministry to the country’s main center-left party SPD in an agreement aimed at ending months of political gridlock. Both the CDU and SPD realized that if they failed, both would lose seats to the rising AfD. Merkel’s conservative Christian Democratic Union (CDU), its Bavaria-only sister, the Christian Social Union, and the center-left SPD agreed to a 177-page deal that leads off with the promise of “a new awakening for Europe.”

Germany has already broken its post-World War II record for the longest time in its latest election on Sept. 24 to the swearing-in of a new government. That is still at least several weeks away. Merkel has been leading a caretaker government, which has not been in any position to play any significant role in the debate on the fate of the EU going forward. That spotlight has been taken by France’s President Emmanuel Macron who seems to enjoy his newfound power.

Schulz’s has taken a course in recent months that simply undermined his authority. On election night, Schulz vowed to take the party into opposition against the CDU. He reversed course in November after Merkel’s efforts to build a coalition with two smaller parties collapsed. Merkel needed only the approval of a party congress of her CDU which seems to do whatever she tells them to do. The Social Democrats are set to get the foreign, labor and finance ministries to run. The finance ministry is the major prize, for it was held by Merkel’s CDU for the past eight years. This has been a major influential position given Germany’s status as the eurozone’s biggest economy. The interior ministry, also held by the CDU, would go to Bavaria’s CSU, which has pushed hard to curb the number of migrants entering Germany.

Mar 5 2018

WALKING INTO MORDOR


Oikophobia — fear and hatred of one’s own culture and people. It has brought down civilizations since there have been civilizations. And now we’re infected, too.

Mar 3 2018

Let’s Try Bank Shaming


An article in the NYT suggests that banks should not allow their credit cards to be used to purchase weapons. Unfortunately, it probably wouldn’t work because it’s doesn’t address the root problem: the existence of evil people.

Mar 2 2018

Canada Will be the Most Impact by a Steel Tariff


Armstrong Economics Blog/Canada

Re-Posted Mar 2, 2018 by Martin Armstrong

Canada is the largest exporter of steel to the United States. The decline in the Canadian dollar has helped this trend in particular. Trump is clueless when it comes to the impact of currency on foreign trade. If he wants to do tariffs, they MUST be indexed to the currency. Failure to do that will cause serious consequences as the dollar rises on the world financial markets in the years ahead. He will create a trade war globally and politicians on both sides remain ignorant of foreign exchange and its impact upon trade numbers.

I have stated many times that the entire system of trade is in a state of confusion. Following Bretton Woods, currencies were fixed to the dollar which in turn was fixed to $35 per troy ounce of gold. Therefore, the accounting system ONLY measured the amount of currencies moving back and forth. It was assumed that you imported more goods if the amount of outflow of dollars increased. Consequently, the way we measure trade today has NOTHING to do with the actual amount of product moving internationally. If you spent more dollars but the dollar decline in value by 20%, then even an increase in imports measured in dollars at 20% was no change in the actual product

Mar 2 2018

Trump to Impose Tariffs


Armstrong Economics Blog/Economics

Re-Posted Mar 2, 2018 by Martin Armstrong

Trump is implementing tariffs against any country that imposes a tariff of American products. This is a tit-for-tat and will be of a like amount. For years, many countries have imposed tariffs on US products when there has been no tariff on their products. The criticism against Trump at Davos was he should put the world economy first not America. They talk a lot but do not play by the same rules.

His announcement this week that he is imposing tariffs on steel and aluminum was the excuse to justify the consolidation period of the stock market. Trump said his administration would impose a 25% tariff on steel imports and a 10% tariff on aluminum. It was not immediately clear whether Trump would exempt some countries from the tariffs, as his national security advisers have urged him to do to avoid hurting U.S. allies. The big problem is that Trump FAILS to understand how the economy truly functions. Imposing tariffs on foreign imports because they can produce something more efficiently is NOT protecting American jobs – its is imposing higher costs on the American public. If America cannot compete against foreign steel and aluminum, the answer is not tariffs, but TAX REFORM and UNION REFORM. If unions fail to understand that demanding higher wages in an uncompetitive manner will only lead to the loss of jobs, then end result cannot be prevented by tariffs.

 

Once upon a time, New York City was the largest port in the United States. Because of unions and outrageous demands, little by little they killed their own jobs. Shipping moved to New Jersey, Philadelphia, and Virginia. What used to be a viable industry today is just a shadow of what it once was. No matter what the field, everything is subject to competition. Imposing tariffs is simply subsidizing overpaid jobs and higher taxes.

It is not JUST wages that cause companies to move and import goods. The US tax code historically looks like the brainwave of a Schizophrenic.  The Democrats come in and taxes rise as high as 94% and the Republicans come in and they go back down. There is absolutely no permanency to the tax code. Consequently, business leaves even when the issue is not wages so much. They leave just to be able to have consistency.

Would you rent an apartment where the lease said the landlord can raise your rent any time he desires if he needs more money to pay something else? This is the entire problem. The Democrats always pitch to tax business and the rich. The biggest shareholder of American public corporations has been the California pension funds (CalPERS) so who actually owns the majority of public companies? It is the people through their retirement funds.

Every time the Democrats raise taxes, they destroy American jobs. So it is NOT entirely the simple matter of wages. First US protective tariffs on washing machines and solar systems were imposed and now on aluminum foil. The US said that aluminum foil from China was being dumped at low prices. Trump imposed measures against some companies from China claiming that American workers and businesses should not be affected by unfair imports.