Outrageous Predictions: Soviet-style economy makes a comeback
By Steen Jakobsen
EU wealth tax heralds return of Soviet-style economy
In 2014, deflation and a lack of growth will create panic among policymakers, leading the EU Commission to table a working group that will focus on different wealth taxes for anyone with savings in excess of USD or EUR 100,000. The initiative will be in the name of removing inequality and will see the richest 1 percent pay a “fairer” share to ease society’s burden.
Several research papers have established that a wealth tax of 5 percent to 10 percent is needed to secure enough funds to create a “crisis buffer” to bail-in/out banks, governments and other liabilities created in this financial and debt crisis. It will be the final move towards a totalitarian European state and the low point for individual and property rights. We have gone full circle back to a Soviet Union model.
The obvious trade is to buy hard assets and sell inflated intangible assets. We would buy the SPDR Gold Shares ETF (GLD:arcx), looking for it to go as high as 180, and sell an equal-weighted basket of Hermes International (HRMS:xpar), LVMH (MC:xpar) and Sotheby’s (BID:xnys), expecting the basket to go from index 100 to 50.
Anti-EU alliance will become the largest group in parliament
From May 22-25 next year, European Parliamentary elections will be conducted across Europe. Since the advent of the Lisbon Treaty in 2009, the European Parliament has not only become a powerful co-legislator, but must be taken into account when choosing a nominee for the post of president of the European Commission (EC), the executive arm of the European Union. European Parliamentary elections are contested by national political parties, but once MEPs are elected, most opt to become part of transnational political groups.