The attack on offshore financial centers continues:
“…An anonymous whistleblower sent to the ICIJ 2.5 million electronic files containing what the organization calls “the biggest stockpile of inside information about the offshore system ever obtained by a media organization….”
When kings were bankrupt, they levied punitive taxes on the productive class. The actors will change but history repeats itself.
The developed world is desperately bankrupt, and is hunting down the rich to feed the sovereign debt market’s voracious appetite for capital. Obama is now even prepared to default on welfare promises made to the elderly to get at the rich:
“…US President Barack Obama is prepared to offer cuts to Americans’ pensions to strike a deficit deal with Republicans, a White House official says. In return, the Democratic president wants higher taxes on the rich…”
Why can’t politician recognize that the core problem is the compound interest on sovereign debt? Albert Einstein is right, compound interest is the eight wonder of the world.
In any case, the bears are coming out of hiding this month to say, I told you so! Ignore them. April might be a month to let the bears jump up and down attesting that they were right. But May should be the month for picking bottoms.
Where would the capital come from? Well, the global wealthy is learning that if you want to preserve your capital, you have to follow the rules. That means get out of hoarding and get into approved investment products. That is out of deposits into real estate and equity. They together with capital flight by bond traders in Japan and Europe will provide the fuel for the next leg higher for income generating asset excluding sovereign bonds.
Good luck in the markets.