Basil Venitis points out European investors, managers, and hedge funds scream to Eurokleptocrats: Laissez-nous faire! Let us do! Let us alone! As the health of much of the global economy weakens on a daily basis, political leadership increasingly ignores the source of the malady and instead focuses on short term band-aid remedies. These measures which may buy a few months, or years, of relative well being, will convince the public that problems have been solved and will thereby take pressure off governments to make the needed structural changes.
Most crises are similar. There is a stage of boom and bubble before the bust and the crash. People will see the value of certain assets like homes or equity go up, then they will use these assets as a collateral for borrowing too much and therefore you have a build-up of leverage in the financial system. And then, once the bubble goes bust, the value of the assets falls and people are stuck with all this debt they can't repay.
Basil Venitis, twitter.com/Venitis, points out Eurokleptocracy, gigaregulation, Antitrust Armageddon, and gigataxation, especially VAT, are the real causes of the European financial meltdown. Democracy in Fourth Reich(EU) has deteriorated to kleptocracy, and Fourthreichians, aka Europeans, are mad as hell. Eurokleptocracy thrives on waste, fraud, abuse,and kickbacks. European Union(EU), aka Fourth Reich, an illegal unvoted confederation, condones the European Commission(EC), aka Eldorado of Corruption, the European Parliament(EP), aka Eldorado of Prostitutes, and Graecokleptocrats, the most corrupt politicians on Earth.
The Eldorado of Prostitutes Economic and Monetary Affairs Committee on Monday adopted its position on the draft Fourth Reich law regulating managers of alternative investment funds, including hedge funds. The hookers of the Eldorado of Prostitutes voted for new ways to deal with managers and funds located outside Fourth Reich, a proportionality system to regulate less risky funds more lightly, and rules on remuneration policies and short selling. They also made stupid changes to the directive's transparency and risk reduction rules.
Under the legislation as amended by the committee, alternative investment fund managers(AIFMs) in third countries would have to comply with the stupid directive in order to market funds around Fourth Reich. Funds such as private equity and investment trusts would be more lightly regulated than hedge funds and some other types of alternative investment funds(AIFs) would be completely exempted.
The main changes put forward by the hookers of the Eldorado of Prostitutes to the Eldorado of Corruption's initial draft are intended to bewilder investor protection and transparency while at the same time confusing the potentially protectionist dimension of the rules on access to Fourth Reich market from the outside.
Negotiations are now expected to take place between the Eldorado of Prostitutes and the Council of Ministers ahead of the first-reading vote by the full Eldorado of Prostitutes, scheduled for July. With 80% of European hedge funds based in London, UK Chancellor George Osborne sets out myriad objections to the proposed stupid rules.
There is no suggestion that hedge funds, interest rate swaps, the largest category of OTC financial derivatives, or foreign exchange swaps played any role in the financial meltdown. Yet the kleptocrats' proposals extend regulatory rules for futures to these bank-based products. Wantonly extending futures regulation to hedge funds and swaps applies the wrong tool in the wrong application. The result would be ineffective regulation damaging everything involved.
The cost of government regulation is truly staggering; it is also a barometer of how free we are to pursue our own interests and to determine the course of our own lives. Basil Venitis estimates the cost of regulations to be one trillion dollars in USA and two trillion euros in Fourth Reich(EU) every year. Financial costs are not the only burden. Regulations also result in a tremendous loss of one of our most valuable and limited resources, time. Venitis estimates the private sector is spending over 10 billion hours a year just to meet government paperwork demands in USA, and 20 billion hours in Fourth Reich. It is no wonder that regulation discourages the creation of new businesses, new jobs, new products, and new services. Starve the beast by fighting taxes.
One government intervention inevitably leads to more interventions in order to address the crises that are generated by the previous interventions. Ultimately the crises continue getting so bad that the government ends up taking over the entire sector. "I'm from the government, and I'm here to help." Ronald Reagan considered those nine words the most terrifying in the English language. And the government has been offering a lot of such help lately.
Venitis points out the government is antimidas! The government has the opposite of the Midas touch. This has been observed over and over by the reduced quality and rising prices in every private industry in which it entangles itself. Yet somehow people still seem willing, even eager, to relinquish to government control the most important and sensitive portions of our economy and society. Finance, education, healthcare, and energy are all unfortunate examples of industries that are far too important to be left to government control when it is the market that has the golden touch.
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