This morning the Aussie market has taken off. Why? Because of this report from Bloomberg News:
“The euro rose after Italian daily La Stampa said the International Monetary Fund is preparing a 600-billion euro ($799 billion) loan for Italy in case the debt crisis worsens, without saying where it got the information.”
We’ve lost count how many rumours we’ve seen from European newspapers about bailouts that never happen – remember the China-buying-Italian bonds rumour?
As we see it, it’s another case of bureaucrats and central banks manipulating the market. Which is funny because…
In March 2008, the Australian Securities and Investments Commission (ASIC) clamped down on “rumourtrage”. That is, the spreading of false rumours “designed to harm a company, such as by forcing a share price down…”
In March 2010, ASIC put the campaign on ice… with only one prosecution.
Roll forward to today and we can see why the regulators have stopped targeting “rumourtrage”. Because the only false rumours investors get are from insiders keen to stop the markets falling.
But maybe Italy will get an IMF bailout. However, don’t think for a moment it’s the final fix the Europeans have waited for.
As you should have learnt by now, the fixing of one problem only creates another problem.
Glenn Stevens says useful economic forecasts require “an understanding of the dynamics of how economies typically behave.”
The reason central bankers interfere in markets is because they know how the markets would behave if they didn’t interfere. Ultimately it would mean the end of central banking.
That’s why you can be assured the bailouts and market manipulation will continue.
And why the RBA has things like the Committed Liquidity Facility and Residential Mortgage Backed Securities in place.
The central bankers have far too much skin in the game to allow anything else.
Cheers.
Kris.
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{ 6 comments }
So now we’re kicking the barrel down the road?
So I guess I can start that new business I’ve been thinking of?
Bloody hell. I’ve been wasting too much time while waiting for certainty.
Without central banks, the economy would be entirely in the hands of politicians.
Would that really be an improvement?
Proof that government has its eyes on [s]your [/s] its super …
I submitted this to the Australian Financial Review letters for publication last night;
ATO tax ruling TR 2011/D3 undermines SMSF estate planning
If you had any doubt about our federal government, treasury and the ATO running a ponzi scheme with an agenda to ensure that your loved ones remain wage slaves in perpetuity then ATO tax ruling TR 2011/D3 will dispel that doubt forever. The uniquely Australian SMSF investment vehicle had the potential to evolve into a truly universal pension scheme that over two or three generations could have unshackled the majority of the population from the need of a government funded handouts in retirement via intergenerational SMSFs.
In my submission to the Cooper review last year I questioned why SMSFs are treated differently from large retail and industry funds who are allowed to pool reserves from its members investment earnings so that the need to sell down assets is avoided. Instead SMSFs are compelled to entirely pay out the residual as death benefit rather than allowing it to be retained in the fund.
The dark forces of excessive fiscal rectitude are cheering the actions of the myopic short term tax revenue raising that our federal government through treasury and the ATO have unleashed on those fiscally literate enough to provide for themselves and their loved ones.
Make no mistake our government is a honey badger (genus weasel family) that has set a sweet sticky trap deceptively called a tax free retirement income that is anything but tax free. Australians now pay tax when they contribute to super (euphemistically called concessional contributions) they pay tax on the accumulating earnings inside super for their entire working life and the real kicker when the main breadwinner dies the adult beneficiaries and spouse are slugged with an accumulation tax of 15% inside the fund plus a 16.5% in the recipients hands and the coup de grace capital gains tax where the asset has to be sold to pay for the usurious tax grab.
When the then treasurer Paul Keating introduced taxation of earnings, contributions and CGT in superannuation back in 1988 by inserting part IX into the 1936 tax act he was compelled by the opposition to soften the slug by introducing a special tax deduction section 279D also known as the anti-detriment payment that was suppose to prevent the taxing of the dead.
In true honey badger form (a carnivorous species with thick skins and ferocious defensive abilities) the old section 279D of ITAA was rewrittenin 2007 into section 295-485 of the ITAA, 1997.
The restrictions imposed on SMSFs by the ATO’s interpretation by way of limiting what can be applied against the anti-detriment payment through reserves (concessional caps) as well as limits on insurance proceeds and disallowing using other members funds to fund the extra benefit payable has stripped spouses and their adult beneficiaries of SMSFs their full entitlements.
What this tax ruling means is when you reach 60 forget about the “tax free” nonsense take your money out while you can because your government are cheating lying bastards.:P
So we pay over 30% on super.
At $180k you’d pay $54k ish in total. Thats…. wait for it…. 30%.
So we’re treated and taxed like the wealthy.
Not a good deal is it?
And that’s why people try to get ahead on their own, through property because of CGT at no mor that 22.5%.
JB…Careful how you present things , that was actually submitted on 25/7/11 and your post reads like you wrote it.
thanks Drood. my bad…
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