Tuesday, 15 April 2014

Capten, Art Tha' Sleepin' There Below?

As someone increasingly detached from the world and indeed reality it is a strange place to live in.  It could be the other way round, reality is mine and it is the world that is becoming detached.

At the sight of this picture there was a small point of detail which made me think that global warming and the rise of sea levels had gone much further than I thought.

If you look at the rear of the vessel you will see the name Luxembourg.  The Principality is on the River Moselle, a big river, but nowhere near that big. 

So how was it that a formerly land locked state had suddenly become a port for huge sea going vessels?  Reading the item on the Tax Justice blog explained all.  Luxembourg has become a place for choice for the registration of ships.

Apparently, it occurred to Luxembourg that if they offered a cheap deal on this shipping lines would, if not sail, flock to them to get the legal bit done.  It would be a nice little earner for the state in these difficult times.

Once it was a matter of pride for ship owners to register in the ports and countries of their origin.  No longer, it is one of those bureaucratic formalities where cheapest is best, especially if some inconvenient matters can be avoided, like tax and legal liabilities.

It is a pity that ploys of this kind cannot be dealt with by the relevant governing authorities.  For example, if English football clubs could play only in the leagues in the state where the actual ownership of ultimate financial control was lodged it could transform world football.

The issue, however, it becoming serious.  In the developed west two blades of the economic scissors are at work.  One is that more and more assets are owned by others. 

The other is that many of those assets together with those owned theoretically by nationals of western states have ultimate ownership listed in the "off shore" entities we call tax havens, albeit that some, like Luxembourg, Andorra, Switzerland etc. are very much on shore.

In an era when predatory extractive finance has become paramount with increasing returns demanded from both working elements and the gaming sectors of operations the economic stresses require states to keep sloshing funny money into the system to keep it all afloat.

If it does not work then we will all sink together and the ships will have nowhere to go to.  Keep your eye on the Baltic Dry Index, one of the interesting economic markers.  

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