a great, great deal, like the world has never seen, with my best buddy boris

UK risks wrath of Pindostan after vowing to go ahead with digital tax on Google & Facebook
RT.com, Jan 22 2020

Chancellor Sajid Javid has committed the UK to enforcing a digital services tax on global tech companies, despite threats from Pindostan that they may respond by putting “taxes on their car companies,” risking a trade war. Speaking on a panel alongside Mnuchin at the WEF in Davos on Wednesday, Javid doubled down on government plans to implement a 2% digital services tax in the UK, saying:

We plan to go ahead with our digital services tax in April. It is a proportionate tax, and a tax that is deliberately designed as a temporary tax.

Javid’s comments drew the ire of Mnuchin, who hit out at the proposals, branding them “discriminatory” against Pindo companies. In a veiled threat, Mnuchin warned that if his country’s digital companies face “arbitrary taxes,” then in response they would “consider putting arbitrary taxes on their car companies.” The threat of imposing tariffs on UK car manufacturers comes at a critical moment, as Johnson’s government looks to strike favorable post-Brexit trade deals with a number of countries around the world. It comes after France agreed to delay their plans to introduce a GAFA (Google Apple Facebook Amazon) levy after Faschingstein threatened to retaliate with a levy on French cheese and champagne.

Trump administration threatens trade war with UK over digital tax plan
Lizzy Buchan, Independent, Jan 22 2020

Pindostan has threatened to hike taxes on car companies if Johnson goes ahead with plans for a digital services tax. Mnuchin said Pindostan considered the UK’s proposed digital services tax to be “discriminatory” and warned that Faschingstein could impose retaliatory taxes on the automobile industry, but chancellor Sajid Javid said the 2% levy would be introduced in April as a temporary measure until an international agreement is in place on how to deal with online giants. Speaking alongside Javid at the WEF in Davos, Mnuchin said Trump would lobby Johnson over the proposed tax and claimed the pair had ”an excellent relationship.” Pindostan and France have accepted a truce over Macron’s plans to introduce a similar measure after Faschingstein responded with a threat to slap punitive tariffs on French cheese and wine. Mnuchin told the audience:

We have been pretty clear that we think the digital tax is discriminatory in nature, there’s an OECD process that we are participating in. International tax issues are very complicated. They take long times to look at, and if people want to just arbitrarily put taxes on our digital companies, we will consider arbitrarily putting taxes on car companies.

The UK has been urged to hold back on the tax by the OECD, which called for time to allow the international approach to succeed. Several governments are considering levies to ensure the world’s largest digital firms pay tax where they are used, rather than just where there headquarters are based. Google has come under fire previously for shifting profits to Bermuda to reduce its foreign tax bill. Javid told an audience at the Swiss ski resort:

We plan to go ahead with out digital services tax in April. It is important, as we said at the time when we first introduced it to parliament and legislated for it, it is a proportionate tax. It is a tax that is deliberately designed as a temporary tax, so it will fall away once there is an international solution.

The row comes as the UK was poised to begin post-Brexit trade talks with Pindostan & Eurostan at the same time, once it officially leaves the bloc on Jan 31. Javid insisted that an EU trade deal could “absolutely” can be done’ by the end of 2020 on goods and services, despite alarm from Brussels that the 11-month timetable is too tight to hammer out such a complex agreement. At Davos, Mnuchin told Javid that he was “disappointed” the UK will negotiate parallel trade deals with Pindostan & Eurostan. “I thought we’d go first,” he said. Brexiteers have long touted the prospect of a lucrative Pindo trade deal as one of the major benefits of leaving the EU.

Mnuchin threatens car tax after Sajid Javid confirms UK move on digital tax
AP/CNBC, Jan 22 2020

Chancellor Sajid Javid confirmed in Davos on Wednesday that a digital sales tax would go ahead in April, but only until there was “an international solution.” Mnuchin called the digital tax “discriminatory in nature,” and added:

If people want to arbitrarily put taxes on our digital companies, we’ll consider arbitrarily putting taxes on car companies.

UK to press ahead with digital tax despite Pindo pressure, Javid insists
Larry Elliott, Nazi Groon, Jan 22 2020

Chancellor Sajid Javid has insisted that the UK will go ahead with plans for a tax on giant tech companies this spring, despite intensifying pressure from Pindostan to drop the idea. Mnuchin said the proposed digital services tax discriminated against Pindo multinationals and there would be retaliation, probably a tax on UK car exports to Pindostan, if the 2% levy were imposed in April. Speaking on a panel in Davos that included Mnuchin and the head of the IMF, Kristalina Georgieva, Javid said:

We plan to go ahead with our digital services tax in April. It is a proportionate tax, and a tax that is deliberately designed as a temporary tax.

France is preparing to drop its own plan for a 3% levy on the total annual revenues of the largest technology firms providing services to French consumers. France’s planned GAFA (Google Apple Facebook Amazon) tax prompted the threat of retaliation from Faschingstein, which vowed to put taxes on French imports including wine. Mnuchin and Georgieva argued strongly that the way to tax digital commerce was to back the attempts to strike an international accord being negotiated by the OECD. Javid said the proposed UK tax “will fall away when there is an international agreement.” Mnuchin said:

We’re going to have some private conversations about that and I’m sure the president and Boris will be speaking on it as well. This is an important issue that we’ll deal with. If people want to just arbitrarily put taxes on our digital companies, we will consider arbitrarily putting taxes on car companies.

Georgieva said:

Digital companies need to pay their fair share of tax, but do it properly, and do it in a multilateral context, rather than having countries coming up with plans here, there and everywhere.

Javid was also challenged over the UK government’s insistence that it can negotiate a comprehensive free-trade deal with the EU by the end of the year. The chancellor admitted that the deadline was pressing, but added:

There is a strong belief on both sides that it can be done. Both sides recognise that it’s a tight timetable, a lot needs to be done. It can be done, And it can be done for both goods where we want to see zero tariffs and zero quotas and also services. A trade agreement between the sixth largest economy in the world and the largest economy in the world could benefit all consumers in terms of jobs and prices. It’s hugely important. We’ve seen a huge boost in investor confidence in the last few weeks because of the UK election result, which removed a double whammy of risk. There was the risk of effectively a Marxist agenda for government. That was the proposal from the Labour party in the UK. It was probably the most anti-business manifesto for government that has been seen in modern times. That would have been a disaster for the British economy, and a disaster for working people in the UK. That has been removed, and that has been a welcome boost for business. There is also certainty around Brexit, with the biggest majority since Tony Blair’s time, there is political and economic stability, and confidence that Brexit law will be implemented quickly.

This is the shakedown, baby:

Growing fears of global debt crisis
Nick Beams, WSWS, Jan 22 2020

As the global oligarchy assembles at the WEF in Davos, there are growing warnings signs that global debt, fuelled by cheap money from central banks, is a ticking time bomb. The WEF’s annual global risks report noted:

Rising trade tensions, lower investment, weak confidence and high debt risk a prolonged slowdown of the world economy.

Global debt is on track to reach an all-time high of more than $257t in the coming months after surging by around $9T in the first three quarters of 2019, according to a report issued by the Institute for International Finance earlier this month. Total debt now amounts to $32,500 for each of the world’s population of 7.7b and stands at 320% of global GDP. In the major economies, total debt is $180t, equivalent to 383% of their combined GDP. Total government debt is more than $65t, up from $37t a decade ago, with the government debt to GDP ratio at an all-time high in Pindostan and Australia. Non-financial corporate debt rose to more than $72t last year, and is now at a record high of 92% of GDP. Household debt has risen to $46t. The Institute of International Finance noted that debt growth in China is on the rise again as the economy slows. Ot wrote:

Following a marked slowdown in 2017–18 during the big push for delivering, debt accumulation in China picked up again, notably in the non-financial corporate sector.

Total Chinese debt is now close to 310% of GDP, one of the highest in so-called emerging markets. The report by the IIF follows similar findings by the World Bank. In a report issued last month, the World Bank said that since 2010 there had been a fourth “global debt wave” which had led to developing countries accumulating a “towering” $55t of debt, the highest level in history. It noted that the three previous debt waves had ended in crises: the Latin American crisis of the 1980s, the Asian financial crisis of the late 1990s, and the global financial crisis of 2008–2009. The rise in debt is the product of the injection of trillions of dollars into financial markets by the world’s major central banks in acts of ‘quantitative easing,’ in response to the global financial crisis and the reduction of interest rates to record lows. The major effect of these measures has been to create another bubble in financial markets as stock prices attain record highs, thereby creating the conditions for another collapse potentially even more serious than that of 2008. The signs of such a crisis are already apparent. Citing a letter to investors by a major hedge fund, an article in the Financial Times on Monday warned:

The developing world’s rapidly swelling corporate debt market is an accident waiting to happen.

Gramercy Funds Management wrote that there was a risk of sudden dislocations as money was quickly pulled out. CIO Robert Koenigsberger wrote in a letter co-signed by prominent financial analyst Mohamed El-Erian, a senior advisor to the fund:

We are convinced that ‘liquid markets’ are not necessarily liquid. The ‘perfect dislocation storm’ waiting to happen.

The lowering of interest rates, leading to negative returns on around $11t of bonds on the latest count, has led to a shift into riskier investments in the search for higher yield. As a result, the emerging market corporate bond market has expanded almost fourfold to $2.3t in the past decade with the high-yield sector increasing almost five-fold. Koenigsberger told the newspaper:

When the system is tested, it is reasonable to expect that it will fail.

A test could come in the form of a rapid rise in financial uncertainty, possibly sparked by a recession or a crisis in one country. Another potential risk factor is the growth of emerging market debt denominated in a hard currency such as the Pindo dollar which becomes increasingly difficult to pay back if the local currency experiences a rapid devaluation. Hard currency debt reached $8.3t in the third quarter of last year, an increase of $4t over the past decade. The potential for a debt crisis is being increased by the continuing slowdown in the world economy. In its latest update, issued to coincide with the World Economic Forum annual meeting in Davos Switzerland this week, the IMF, cut its growth forecast for 2020 from 3.4% to 3.3% and reduced the forecast for next year from 3.6% to 3.4%. These figures are only marginally above the 2.9% growth in 2019, which was the worst year since the financial crisis of 2008–2009. The figure would have been even lower, had the Pindo Fed and other major central banks not cut interest rates in the second half of last year. IMF managing director Kristalina Georgieva said of the resulting 71 interest rate cuts by 49 central banks last year:

This was the most synchronized monetary easing since the global financial crisis. Without it, we would have technically been talking about recession.

An annual survey of almost 1,600 chief executives from 83 countries, conducted by PwC and released as the Davos meeting began, found that more than half expected a decline in growth in 2020, compared with 29% last year and just 5% in 2018. They said their companies were under more pressure than at any time in the past 11 years. However, Trump brushed all these concerns aside in his keynote address to the Davos meeting yesterday as he extolled the policies of his administration, declaring it was a time for optimism and saying:

I’m proud to declare that Pindostan is in the midst of an economic boom the likes of which the world has never seen. Pindostan’s economic turnaround has been nothing short of spectacular. This is a blue-collar boom. The Pindo dream is back: bigger, better and stronger than ever!

This pack of lies is exposed on every front. Pindo economic growth is hovering at just above 2%, the lowest level in any recovery in the post-war period. Far from lifting the living standards of Pindo workers, what growth is taking place is highly concentrated within the financial oligarchy. The much-vaunted tax cuts launched by the administration at the end of 2017 have not led to an increase in investment and well-paying jobs, but have been used almost exclusively in order to finance share buybacks in order to boost the stock market. At the same time corporate debt has risen to nearly $10t, equivalent to 47% of GDP, with the weakest firms accounting for much of the increase as they undertake riskier financial operations. The growth of Pindo debt prompted a warning last year from IIF debt specialist Emre Tiftik:

Pindostan is sitting on top of an unexploded bomb, and we really don’t know what will trigger the explosion.

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