Gibraltar

 

Gibraltar Rock

Gibraltar Monkeys

Global Manufacturing Ranking

The leaders of global manufacturing are changing rapidly, China, India and Russia are rising and Germany, Japan, UK, and Canada are sliding. The following chart simplifies the evolution of global manufacturing economies over the last four decades.

Why Robbing Banks does not pay!

In an article for Significance Magazine, economists Barry Reilly, Neil Rickman and Robert Witt explain why robbing banks stinks as a profession.

The return on an average bank robbery is, frankly, rubbish. It is not unimaginable wealth. It is a very modest £12 706.60 per person per raid. Indeed, it is so low that it is not worth the banks’ while to spend as little as £4500 per cashier position at every branch on rising screens to deter them.
A single bank raid, even a successful one, is not going to keep our would-be robber in a life of luxury. It is not going to keep him long in a life of any kind. Given that the average UK wage for those in full-time employment is around £26 000, it will give him a modest lifestyle for no more than 6 months. If he decides to make a career of it, and robs two banks a year to make a sub-average income, his chances of eventually getting caught will increase: at 0.8 probability per raid, after three raids or a year and a half his odds of remaining at large are 0.8×0.8×0.8=0.512; after four raids he is more likely than not to be inside. As a profitable occupation, bank robbery leaves a lot to be desired.

Be sure to read the full article for more details on the varying gains and losses when the team is bigger and whether or not a gun is used. Spoiler: an additional member to the robbing team raises the expected haul by about £9,000, and the use of a firearm raises the expected output by about £10,000. Just don't get arrested.

Drugs, Dollars and Banks

Drug is a precious commodity but also a powerful social disruptor able to wreak havoc in a society and weaken it; it was used in the past in China during the Opium Wars to weaken the Qing Dinasty and accumulate huge profits for Britain or today in Afghanistan and many other Latin and African countries to fragment and destroy the social fabric and control its production and profits.


Political use of drugs

Drugs are a powerful weapon when deployed on a population, its many advantages include:

• docility of addicted population
• increase of economic indebtedness
• increased stress on health services and social services
• social fabric fracture and degradation
• massive outflow of capitals to foreign banking systems and suppliers
• increased corruption and illegality
• creation of an indentured service system

Drugs have the same effect of war mines on a population, their purpose at war is not to kill in many cases but simply cripple people in order to create a taxing burden for the society.

Drugs have many similarities with oil as well; the reserve currency for drug smuggling and transactions is the dollar, every drug transaction is practically paying a fee to the US Federal Reserve, not surprising that such a trade is protected by concerned governments all over the world.
If the Iraqi wars were fought for oil; Afghanistan was in part fought for opium and it started shortly after the Talibans started to destroy opium fields and banned drugs trade.

This is past history and it can explain why war to drugs is and will always be a lost war, no one is really interested to fight such a profitable business regardless of occasional moral proclamations broadcasted on TV.

New Drugs economy

The future of drugs is the new synthetic trade growing rapidly and evolving technologically to become independent from natural sources.

If the new Canadian producers of synthetic drugs will succeed the economical landscape of drugs could change rapidly in the following years, removing the difference between producers and consumers countries and allowing for mass production of drugs without need of natural resources and reducing the time to market and cross-border illegal trade.

Still now though who is profiting the most from drugs is the banking system who launder the profits and reap the hidden tax of the dollar as a reference currency in the case of USA.
Let us not forget that when the Euro was introduced a 500 Euro bill was created specifically for the necessities of smugglers, cartels and bankers, at that time the major aspiration for the Euro was to replace the dollar as preferred currency of choice for drug barons, arm dealers and robber barons.

The Guardian today added an interesting outlook (brief excerpt below) on where and how profits from this trade are done.
It will not raise any parliamentary discussion or moral debate on the war to drugs, the issue has disappeared slowly and silently from public debates while drugs have been more and more popularized by the media as socially acceptable if not socially cool, after all banks are drowning in debt, economies are collapsing then what better way to fill the empty coffers with an increased number of addicts and stupor their futures and fortunes away.

From The Guardian:
 

The vast profits made from drug production and trafficking are overwhelmingly reaped in rich "consuming" countries – principally across Europe and in the US – rather than war-torn "producing" nations such as Colombia and Mexico, new research has revealed.
The most far-reaching and detailed analysis to date of the drug economy in any country – in this case, Colombia – shows that 2.6% of the total street value of cocaine produced remains within the country, while a staggering 97.4% of profits are reaped by criminal syndicates, and laundered by banks, in first-world consuming countries.

Gaviria and Mejía estimate that the lowest possible street value (at $100 per gram, about £65) of "net cocaine, after interdiction" produced in Colombia during the year studied (2008) amounts to $300bn. But of that only $7.8bn remained in the country.
"It is a minuscule proportion of GDP," said Mejía, "which can impact disastrously on society and political life, but not on the Colombian economy. The economy for Colombian cocaine is outside Colombia."

The mechanisms of laundering drug money were highlighted in the Observer last year after a rare settlement in Miami between US federal authorities and the Wachovia bank, which admitted to transferring $110m of drug money into the US, but failing to properly monitor a staggering $376bn brought into the bank through small exchange houses in Mexico over four years. (Wachovia has since been taken over by Wells Fargo, which has co-operated with the investigation.)
But no one went to jail, and the bank is now in the clear. "Overall, there's great reluctance to go after the big money," said Mejía. "They don't target those parts of the chain where there's a large value added. In Europe and America the money is dispersed – once it reaches the consuming country it goes into the system, in every city and state. They'd rather go after the petty economy, the small people and coca crops in Colombia, even though the economy is tiny."

With Britain having overtaken the US and Spain as the world's biggest consumer of cocaine per capita, the Wachovia investigation showed much of the drug money is also laundered through the City of London, where the principal Wachovia whistleblower, Martin Woods, was based in the bank's anti-laundering office. He was wrongfully dismissed after sounding the alarm.
Gaviria said: "We know that authorities in the US and UK know far more than they act upon. The authorities realise things about certain people they think are moving money for the drug trade – but the DEA [US Drugs Enforcement Administration] only acts on a fraction of what it knows."
"It's taboo to go after the big banks," added Mejía. "It's political suicide in this economic climate, because the amounts of money recycled are so high."

Italy staggering business malpractices

The following charts from the Telegraph illustrate how regulations and poor administration have held back Portugal, Ireland, Italy, Greece and Spain's economies, using data from the Doing Business project, which carried out by the World Bank, measures the time and cost of common business activities.

The charts compare eight European Union (EU) countries (Italy, Greece, Portugal, UK, Germany, France, Ireland, Spain) and the United States, in terms of days it takes to

• get construction permits, 
• get commercial electricity connected, 
• enforce commercial contracts 
• export goods 

Overall, the United States leads with an average of 100 days to carry out business in the above categories whereas it take 420 days in Italy.  (See Graph Below)

One glaring example is contract enforcement.

Contracting is an essential and integral part of transacting business and contributing to a country's economic growth.  Enforcing a contract takes about 9 months, which is not that great, yet it takes more than two years to enforce a contract in Greece, and more than three years in Italy.

One interesting statistics is that the U.S. leads the pact in getting construction permit in less than a month, which probably partly explained the housing bubble.  The same process takes more than 8 months in Italy and Portugal to get a construction permit.

Another example is that while it takes 17 days to get commercial electricity connected in Germany, and more than two months in the US (which is bad enough), the same task takes over six months in Ireland and Italy.

Exporting and importing a standardized cargo of goods by ocean transport also takes longer in Italy, Portugal and Greece compared to other European countries as well as the the U.S.  Telegraph also pointed out that it takes nearly three years to resolve a commercial dispute, compared to a year in Germany and France due to Italy's highly bureaucratic judicial system,.

Chart Source: The Telegraph, 21 Nov. 2011

The True Debt Picture