...a currency where instability on anything resembling that scale would result in immediate cessation of global trade. Things will go to shit long before high inflation ever has a chance of kicking in. But that's not what Faber's little groupies want to hear, so that's not what he says...
Inflation is uglier than what he thinks, people and businesses continue to borrow even at high inflation rates, that's because they need the money, actually more so than they did in the past. He's probably thinking people got into alot of debt from 1998-2008, and most likely he's thinking it's all below 6% APR and are going to stop borrowing and start making money from 2010-2020. No there are less jobs from 2010-2020, cost of living is constantly rising, and income is sh*ttier than before, you want to leave your job find a higher paying one, but you can't cause there are hardly any f*cking jobs out there ... the f*cking sink in your house just broke, you need to borrow money to get it fixed, and you know what? the bank is asking for 45% APR on an unsecured loan.
The Euro gained 100% on the $ last decade. Did world trade end? No, global economy boomed like never before. Who is to say the same wouldnt happen when the $ drops another 100%. Or 200%. or 300%. Or more. Sure, US citizens get the stick but that's only what, 1/20 of world population? Not a big deal from a broader perspective right.
That's correct only if you form a "real corporation" with employees, a physical presence, a "real" business with revenues and costs etc. Also, in these cases, the burden of proof is on the tax payer to prove this offshore corporation was not primarily formed as a tax avoidance vehicle. Trading from your home in the Caribbean with an offshore LTD shell corporation and a US passport and you're 100% liable to US taxation.
Somewhat interesting Faber is not touching on the Japanese de/inflation picture, yet they increased national debt to GDP to 200% (compared to the USA's 80%), printing money through QE and running stimulus program after stimulus program trying to substitute private consumption with government consumption. The 10y JGBs yield is 1.5% (where is the Japanese bond crash?) and there is no hyperinflation -- quite the opposite is the case. How come Faber never talks about Japan? Doesn't quite fit with his Zimbabwe picture?
This is true, CFC laws seem to be specially tough in the US http://en.wikipedia.org/wiki/Controlled_Foreign_Corporation However there are always ways around it and loopholes, one just need to devote some time and pay for some offshore advice
I feel sorry for the poor SOBs with US passports. They will get raped. It's not like Europe won't hike taxes like mad, but European & much of the rest of the world can at least freely choose their residence and thus tax jurisdiction. Flashback to 1930-50s top marginal income tax rates? http://www.heritage.org/Research/Taxes/images/35082274.gif
Yes, it is interesting how going off the gold standard combined with borrowing and consequent monetizing has allowed marginal tax rates to be brought down. The only way this chart makes much sense, however, is to consider marginal tax rates together with indirect taxation via inflation, delayed taxation (direct+indirect) which we call borrowing, and cost shifting which occurs when costs are shifted from the Federal level to the States. Only when you take all these factors into consideration, which is difficult to do with any accuracy, will you have a grasp of the total tax burden. And that's what matters in real life, though political reality is very different. I don't know whether the total current tax burden in the U.S. has increased or decreased, but my gut feeling is that it has increased for most. I am certain however, that when delayed taxation and cost shifting are included, that the net tax burden has most definitely been increased. The present U.S. economy has resulted in an extraordinary windfall to small segments of the population, but been correspondingly disastrous for larger segments. This will continue the polarization of the U.S. middle class toward extremes and bodes ill for the long term economic and social health of the nation.