The Hunt for Taxes is now creating a crisis in healthcare in Britain. The UK government is gearing up for a massive tax clampdown targeting private sector contractors. The UK Treasury estimates in its budget that this taxing of private contractors in healthcare will create £185m in new taxes for the year 2017/18. This is known as the IR35 regime, which will apply to hundreds of thousands of freelancers outside the public sector.

At the core of this is the issue where someone who is incorporated pays less tax and national insurance than an employee on the same income working freelance under contract. Many suspects that this is just a test run and the government will extend the tax increases to the private sector in a year.

Because most are freelance contractors in the Public Sector healthcare, there is an immediate decline in patient care standards in NHS due to this hunt for taxes under IR35. UK healthcare is deteriorating rapidly. A survey of 450 healthcare locums by ContractorCalculator and the Independent Health Professionals Association(IHPA) has revealed that the NHS is failing to replace critical contract workers who have been forced out of the sector due to IR35 and questionable compliance procedures. It’s all about taxes.

And so many people in the USA think that public healthcare is free in Europe and so much better, they are just victims of propaganda. There is a major crisis unfolding in the British healthcare system all because of the hunt for taxes.

QUESTION: Mr. Armstrong; All the news here in Britain is always how bad it will be if we leave the extortion ring in Brussels. You have mentioned that we are the biggest market for German cars. What will Brexit do to the EU?

Thanks

GD

ANSWER: Once the British exit from the EU “extortion” ring as you call it, the remaining nations will have to pay more than an additional €10 billion euros to keep Brussels floating in jobs and exorbitant pension. Besides the German auto-industry being clipped for political reasons as the EU punishes Britain to act as a deterrent to prevent others from leaving, Germany’s proportion of making up the shortfall from BREXIT will be almost €4 billion. With BREXIT, everyone will have to contribute an additional 15% so they can do nothing but make more miserable in Europeans.

European Parliament President Antonio Tajani calls for a doubling of the budget of the European Union. “We need twice as much money as today, so 280 billion euros instead of 140 billion euros per year,” said Tajani the spark newspapers. The doubled EU budget should not be financed by additional transfers from the Member States, but by the introduction of taxes.

“This will require new EU own resources, such as a financial transaction tax on stock exchanges,” Tajani said. The President of the European Parliament justified his initiative with the costs of dealing with the refugee crisis and the fight against terrorism, as well as the increased need for investment. “Europeans must invest more in energy and digitalization of the economy in the future,” the Italian said. Only in this way could the EU compete with the US, China, India or Russia in global competition.

The EU Parliament is currently negotiating with the finance ministers of the EU governments for the Community budget for the year 2018. The EU parliament demands funds of 146.7 billion euros for the coming year – 2.3 billion euros more than the finance ministers want to make available.

Almost 80 percent of the EU budget is covered by the contributions of the member countries, the remainder comes from so-called own resources of the EU – these are mainly customs revenue. Germany, the largest net contributor, contributes just under 20 percent to the EU budget.

On top of that, European Parliament President Antonio Tajani has called for a doubling of the budget of the European Union. Since the EU cannot issue debt, that means the doubling of the EU budget should not be financed by additional transfers from the Member States, but by the introduction of taxes. They are looking at increasing the tax burden even more on Europeans in the Eurozone.

The EU wants to impose its own tax resources, such as a financial transaction tax on stock exchanges. This is being justified, believe it or not, to cover the costs of dealing with the refugee crisis and the fight against terrorism as they claim. They are right now negotiating with the finance ministers of the EU governments for the Community budget for the year 2018. They now want 146.7 billion euros for the coming year – 2.3 billion euros more than the finance ministers want to make available. Brussels knows how to spend money. Almost 80 % of the EU budget is covered by the contributions of the member states. The rest is primarily customs revenue. Germany, the largest net contributor, contributes just under 20 percent to the EU budget.

QUESTION: Mr. Armstrong; I want to thank you so much for shedding light on what can only be deranged forecasts on the dollar and gold and never change regardless of how much money they lose people year after year. I received this email with the headline How Much Longer Can the Petrodollar Survive? They claim that now adversarial nations like “China, Russia and Iran” are threatening the petrodollar hegemony by establishing their own trading and banking infrastructure that excludes dollars for trade. Suddenly Iran is now a world power and as you said at the conference, the dollar support is not trade or oil, but where big money parks.

My question is, just how can these people sleep at night putting out false information all the time? Isn’t that what the investment banks pled guilty to putting out false forecasts to support their own positions during the Dotcom bubble?

ANSWER: Yes, you are correct. It is one thing to put out analysis that is unbiased and it is raw corruption to put out forecasts that support your own investments creating a conflict of interest. It would not be a criminal act as long as they disclose what their portfolio is. Only the government gets a free get out of jail card for fake forecasts.

The decline in commodities was was due to a number of factors, including an economic slowdown in China, a severe recession in Brazil, with falling prices for oil and other commodities, and exchange rate volatility that saw the dollar rise. Despite positive growth in trade volume terms, the current dollar value of world merchandise exports declined by 14% in 2015, to US$ 16.0 trillion, as export prices fell by 15%. Even the dollar value of world commercial services exports also fell 6% in 2015 to US$ 4.7 trillion, although the decline was less severe than for merchandise.

All these claims that the “petrodollar” is going to collapse are just a total joke. Oil is less than 10% of world trade. These people are living in the ’70s. Hey, cut the hair and get rid of the bell bottoms. It’s 40+ years later!

There is not even an attempt to be a true honest analysis of the subject. Just look at the figures. The oil and gas drilling sector make up between 4.6% and 6.5% of the global economy.  The FX market DAILY trading volume is about $5.3 trillion which dwarfs the equities and futures markets no less oil and gold.

The support behind the dollar is (1) it can be used worldwide without permission from the USA as is the case with the Japanese yen. It is a single currency with a single federal debt market where BIG money can park – that is not the case for the Euro, Ruble, or Yuan. The Iranian Rial has gone through major inflation. It will be devalued and called the “toman” despite the aliollah Seif, the governor of the Central Bank of Iran (CBI), who confirmed that the CBI has sent a bill to the government requesting the removal of a zero from the currency to reflect the public’s use of the term “toman” to refer to 10 rials. Any revaluation must wait until inflation has stabilized. And this is the currency that will dethrone the dollar? Give me a break!

Thanks to a string of screw-ups and bugs, an unsuspecting developer recently took possession of an estimated $US390 million worth of the Ethereum cryptocurrency by accident. In an attempt to give back the money, however, the guy ended up locking up the funds permanently. Essentially, the money has just evaporated.

It turns out that hackers started the trouble getting into the cryptocurrency wallet service stealing about $42 million. To then patch the vulnerability to their block-chain technology, they introduced a bug that affected multi-signature wallets. These are wallets which require several people to enter keys before funds get transferred. This was intended to be top security for Ether which is the second largest cryptocurrency. Somehow, a guy called “devops199” triggered the bug and took control of all multi-sig wallets unintendedly. Then devops199 attempted to reverse the process to give back the money which then triggered they bug. The result was the destruction all of the funds. The bug caused a chain reaction of events that locked all multi-signature wallets that cannot now be unlocked.

Welcome to the world of Cryptocurrency.

Leonardo da Vinci’s 500-year-old painting known as Salvator Mundi (Saviour of the World) is the only work in private hands. It just sold at Christie’s auction room in New York for a record $450m – almost half-billion. The painting apparently once belonged to King Charles I of England back in the 1600s. The last time it was sold at auction was 1958 when it was sold in London for a mere £45. At that time, it was generally believed to have been the work of a follower of Leonardo rather than the work of Leonardo himself.

The painting was sold by the family trust of the Russian billionaire collector Dmitry E Rybolovlev, who is reported to have bought it in a private sale in May 2013 for $127.5m. So that’s a pretty good profit. It is the highest auction price ever paid for any work of art.  There are fewer than 20 of Leonardo paintings in existence. The Salvator Mundi, is believed to have been painted sometime after 1505. The bidding began at $100m and the final bid for the work was $400m, with the buyer’s premium, the full price up to $450.3m. The unidentified buyer was involved in a bidding contest, via telephone, that lasted nearly 20 minutes. The mystery buyer hopefully lives outside of New York so that avoids the sales tax. Purchases above $110 are subject to a 4.5% New York City Sales Tax and a 4% NY State Sales Tax. That makes anything bought in New York City subject to a total Sales and Use Tax of 8.875%. What is astonishing, is that with taxes, rates rise with the more people. That is counter to capitalism which dictates that prices decline with scale. Government costs rise with the scale showing something is just not right!

Obviously, this is serious money still moving off the grid!

COMMENT: Mr. Armstrong; First I want to say I greatly admire your work. You are unbiased with markets, politics, and religion. Your cycle which targets 2032, agrees with the Islamic cycle some call the cycle of power which will peak. According to the Quran, there is a cycle of power, and this is mentioned in chapter 30 “the Romans”, verse 9,

30:9 Have they not traveled through the earth and observed how was the end of those before them? They were greater than them in power, and they plowed the earth and built it up more than they have built it up, and their messengers came to them with clear evidence. And Allah would not ever have wronged them, but they were wronging themselves.

REPLY: Yes, the Quran recognizes that there is also a cycle of about 300 years. What is interesting, is that in Christianity, the Revelations also expressly recognizes a cycle:

Revelation 20:3 He threw him into the Abyss, and locked and sealed it over him, to keep him from deceiving the nations anymore until the thousand years were ended. After that, he must be set free for a short time.

Saṃsāra (Sanskrit, Pali; also samsara) in Buddhism the cycle of death and rebirth to which life in the material world is bound. Samsara is considered to be dukkha, unsatisfactory and painful, perpetrated by the desire and avidya (ignorance), and the resulting karma. In Buddhism, rebirths occur in six realms of existence, namely three good realms (heavenly, demi-god, human) and three evil realms (animal, ghosts, hellish). Samsara ends if a person attains nirvana, the gaining of true insight into impermanence and non-self reality.

It is fascinating that we do live in a world of ignorance denying that cycles exist because this gives power and justification to the government. They seize power to eliminate cycles and create the perfect existence, but corruption destroys the best intentions. We have risen in the cycle of corruption and that is a peril. I agreed with Buddhism insofar as the cycle is created by our ignorance of it.

Edward Gibbon wrote in his Decline and Fall of the Roman Empire:

“The hill of the Capitol, on which we sit, was formerly the head of the Roman Empire, the citadel of the earth, the terror of kings; illustrated by the footsteps of so many triumphs, enriched with the spoils and tributes of so many nations. This spectacle of the world, how is it fallen! how changed! how defaced! The path of victory is obliterated by vines, and the benches of the senators are concealed by a dunghill.“

However, he too illustrated how corruption destroys civilization. Once the rule of law crumbles into the self-interest of the government, then the very purpose of creating a civilization no longer exits. He explained how the fall of the Roman Empire began with the collapse in the rule of law under Commodus (177-192AD).

“[D]istinction of every kind soon became criminal. The possession of wealth stimulated the diligence of the informers; rigid virtue implied a tacit censure of the irregularities of Commodus; important services implied a dangerous superiority of merit; and the friendship of the father always insured the aversion of the son. Suspicion was equivalent to proof; trial to condemnation. The execution of a considerable senator was attended with the death of all who might lament or revenge his fate; and when Commodus had once tasted human blood, he became incapable of pity or remorse”

(Book 1, Chapter 4).

Subtly, the EU is looking to establish preparations for the coming banking crisis and how to protect the banks from massive withdrawals. The solution? The EU wants to be able to temporarily free up credits for the banks and at the same time to freeze bank deposits, In other words, like Greece, you just won’t be able to withdraw funds.  Obviously, everything will be frozen. The current EU plan envisages blocking account disbursements for five working days and with the authority to extend any suspension to up to 20 days. They may need longer!

I recommend that you have 30 days worth of cash on hand. What the authorities do not understand is that if they freeze one bank, a run will unfold on all banks. The public will not believe whatever the government says. Therefore, banks that are not in crisis can be pushed into a crisis by a contagion. That is simply how it all unfolded in 1931-1933. The only way to stop a contagion will be a bank holiday and you have to close them all.

CASH will be KING in the middle of such a contagion.

QUESTION: Mr. Armstrong; I want to thank you for a spectacular WEC. I was amazed at how many pension funds were there. They were some of the biggest and we hear that they are listening to you and had shifted into equities. Some were talking at the cocktail party how you have really helped them even selling the strategy to their boards. The ones who were there were from Europe, Japan, and Canada. Do any American pension funds listen to you?

Can’t wait for next year!

Thank you for opening my eyes.

LW

ANSWER: I am not at liberty to discuss who are clients and who are not. It is true, that our biggest clients in pensions are ALL outside the USA. They see the world from an international perspective more so than American firms who still do not understand currency. We have been the currency specialists since the 1970s. Consequently, non-Americans have been a major component of our global business. American funds tended not to understand or even consider currency risk. To this day, schools do not teach hedging currency risk. It is not even discussed.