If only the free market ran US consular services

Reporting from: Phnom Penh, Cambodia

There are a few things in life that really get to me. One of those is forced inefficiency.

When the tuk-tuk driver doesn’t quite know how to find my hotel here in Phnom Penh, I don’t worry about it. We can work it out as gentleman of our own free will. The free market will work itself out.

But when I’m forced to participate in processes that are made inefficient by their very nature, I get quite a bit more frustrated.

Such is a window into my emotions during my recent visit to the US Consulate here in Phnom Penh. I needed to get a document notarized for an American friend of mine, and the consulate is the only place in Cambodia, short of hiring a law firm which an American agency may or may not reject, to get it done.

I’ve notarized plenty of documents in my business life. As an entrepreneur, I’ve needed numerous things notarized over the years. In most places, it’s a painless process. Practically every American bank will notarize documents for their accountholders for free. Show them a photo ID and you’re in and out in a few minutes.

Not so with the US government. (Are you surprised?)

In an effort to desperately cling on to their feelings of superiority, the American government makes using their consular services a constant reminder that you are a slave under their tutelage. Every move they make is designed to make you feel impressed by their majesty and afraid of their retribution.

It starts when you arrive for your “appointment”. The government is extraordinarily inefficient, so things such as appointments exist only for them to bend you to their will. They have no intention of keeping such an “appointment”, since they will see you whenever they wish. (Well, at least during one of the THREE hours they’re open to you, four days a week.) But sociopaths get a rush out of making other people jump through hoops and dismissing them when they so much as skip a beat.

It’s all about getting you to submit.

After getting green lighted to enter the US Embassy, you stand in a line where a security officer lets people in the door in an indiscriminate fashion. There’s no regard for the line or who arrived first; after all, this is a government that bashes people who pay millions of dollars in taxes for not paying their “fair share” while half of their subjects pay zero.

It’s all about getting you to submit.

Upon further waiting, you get to enter the inner sanctum. This is the security area, where you are reduced to a number, given a badge that insists you have an escort, and go through a metal detector. On the other end, you are forced to part company with all objects in your possession with the exception of a single file folder for documents. (And a passport, which they tell you to leave behind the first time anyway.)

That means no cameras, no cell phones, no miscellaneous scraps of paper, no nothing. It’s ironic that the consulate has surveillance cameras watching you every few feet, but you’re prohibited from having anything that could record any of your interactions inside. It’s an ample reminder of how Big Brother is watching you in his full police state glory… but you’re not good enough to join in.

After all, it’s all about getting you to submit.

Upon being cleared by the guys in the security bunker, you make your way to the REAL inner sanctum. The tyrannical empire’s nerve center in a far away land. Now, you have to muster all of your strength to open a door so thick it could claim it’s got “curves like Beyonce”.

You pass yet another security guard and another metal detector. Once on the other side, you’re now in as deep as you can get.

It’s here where the inefficiency and bureaucratic arrogance of a falling state really happens.

Since having an appointment is just a front to turn away any poor sucker who shows up at the last minute, you take a number and wait. And wait. And wait. They’ll help you when they’re damn good and ready.

Looking around, you see all of the future victims of this tyrannical regime. People who bought into the government’s propaganda mill that The Land of the Free is still… well, The Land of the Free. People who believe life will be better in a country that drones tens of thousands of people to death, just like they contributed to the death of their Cambodian ancestors.

Finally, you become, if for just a moment, the chosen one. Your number is called and the fun really begins. Whatever consular services you came for, you’ll be told that you skipped a step and have to start over. The step usually involves paying. The whores in Phnom Penh’s red light district could learn a real lesson from the US consulate.

It costs $50 to notarize a single document. Need duplicate copies? $100. You’ll be harangued as to why you even brought two copies if you only want one notarized. Those excessive taxes you send to Uncle Sam aren’t enough for some overpaid lackey to stamp a piece of paper.

You have to feed the beast.

Eventually, you bounced from once person to the next, waiting fifteen and twenty minutes at a time in between. You’ll think they forgot about you. And you can’t leave, since they have your slave card (a coincidence, I’m sure).

I think the official work policy for consular services officials is two minutes on, twenty minutes off. Either that or one fifteen-minute break per condescending scoff at a citizen – er, subject.

Finally, after dealing with three or four different people, all of whom take your passport and prance around the back offices of the consulate, far away from the prison visitor-style glass windows that separate the unwashed masses from the elites, someone finally summons you to be helped.

This person, whom you haven’t seen before because they were on their fifteen-minute break after giving the stink eye to another poor schmuck, ensures once again that you paid your ransom fee and holds onto your passport throughout the process of whatever consular service you came for. (Hey, they wouldn’t want the slave to escape while they’re being “serviced”.)

All told, it takes you about fifty times longer to conduct a simple business traction with your government than it would have in the free market. What a bank can do for free in two minutes with a smile on their face, The Land of the Free’s overpaid overseas lackeys can do in just shy of two hours.

If that isn’t an indictment of Big Government, I don’t know what is.

If the US government allowed its employees – most of whom are actually local foreign nationals who sold their soul to work for the Leviathan – to actually get some work done, things could move much more efficiently. But like any big crybaby angry that its power is waning, the US government needs to make you wait for it in order to get its rocks off.

On my way out, I asked one of the Cambodian guards in the security bunker what his last job was. He said, “I worked in a hamburger restaurant”, clearly beaming over his new post. He was a nice guy, perhaps yet uninitiated into the ways of spitting on people. I just smiled, said “thank you”, and exited out the last ridiculously hard-to-open door, thinking about how high the government sets the bar for the talent they believe is worth charging you such a hefty fee for.

Does anyone else think the government could just outsource immigration and consular services to American Express and The UPS Store and save itself a lot of money?

Fukushima – Deep Trouble


Fukushima Daiichi Nuclear Power Plant remains totally out of control with no end in sight

Fukushima – Deep Trouble Image Credits: ssoosay, flickr

Robert Hunziker | Counterpunch

The Fukushima Daiichi Nuclear Power Plant disaster may go down as one of history’s boundless tragedies and not just because of a nuclear meltdown, but rather the tragic loss of a nation’s soul.

Imagine the following scenario: 207 million cardboard book boxes, end-to-end, circumnavigating Earth, like railroad tracks, going all the way around the planet. That’s a lot of book boxes. Now, fill the boxes with radioactive waste. Forthwith, that’s the amount of radioactive waste stored unsheltered in one-tonne black bags throughout Fukushima Prefecture, amounting to 9,000,000 cubic metres.

But wait, there’s more to come, another 13,000,000 cubic metres of radioactive soil is yet to be collected. (Source: Voice of America News, Problems Keep Piling Up in Fukushima, Feb. 17, 2016).

And, there’s still more, the cleanup…

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Russians and Chinese are ditching the dollar as Europeans start using renminbi in their reserves


At present, US dollar accounts for roughly 61% of the world’s foreign exchange reserves.

It’s still a safe bet for most, not because the currency is actually strong, but because so many others are already so reliant on it.

Between those with reserves in and pegs to the US dollar, many countries have given their allegiance, and now have a vested interest in the health of the currency.

Due to this common interest, a sort of unofficial, involuntary alliance has been formed between them all.

Together, they’re all playing along, pretending that everything is fine. If the dollar collapses, they’re all screwed, so they’ve got to get each other’s backs.

From the throne of the world’s reserve currency, the Federal Reserve, with the power to print the US dollar, feels dangerously omnipotent.

They can get away with just about anything. For now.

The central bankers get to print dollars and spend them at current prices, before the stuff hits the wider market and diminishes its overall value.

And for the time being they don’t really face any consequences. The whole world just absorbs it. Other countries really have no other choice.

But they’re getting tired of putting up with this abuse, and the unrest is growing. New alliances are being made, this time to dethrone the dollar.

Just this week yet another currency swap agreement was made between the Chinese and Russian central banks. This time for 150 billion renminbi.

Trade volume between China and Russia will reach $100 billion (600 billion renminbi) next year, and is expected to reach $200 billion in 2020. This latest currency swap agreement will greatly reduce the need for dollars in their transactions.

Currently, 75% of trade between the two countries is settled in dollars. When they signed the agreement for the bilateral currency swap, Russian deputy Prime Ministers said this will “encourage companies from the two countries to settle trade in local currencies and avoid the use of a third country’s currency.”

Who do you think that was aimed at?

Threatened by the growing strength of China and Russia, the US is actively working to vilify the two. Between the headlines of war, both cyber and military, the government is unsubtly trying to bring back the days of yellow peril and the red scare.

However, it can’t use the same tactics on its longstanding ally—Europe.

Even the European Central Bank has started discussions on the possibility of including the renminbi as one of its reserve currencies.

And the euro and the renminbi are already directly tradable as of this month.

On Tuesday the UK also became the first country besides China to issue a sovereign bond in renminbi.

This coincided with the issuing of 180 million renminbi of corporate bonds by China’s ICBC in South Korea. Another first. South Korea is firmly on the renminbi train as renminbi deposits in the country jumped 55-times in just one year.

It’s very clear where the trend is going. All these news items are pieces of the same puzzle. The US dollar’s throne is shaking as it’s losing its importance and status as the preeminent currency in the world. Renminbi is on the way up.

The whole existing order of a single ruling currency is currently being challenged.

A new financial era is coming.

Negative interest rates in the US? Just ask the FDIC.

Last week the FDIC released its annual financial statements, giving the public a glimpse into the financial condition of the organization responsible for backing up the entire US banking system.

The numbers are pretty incredible.

The FDIC maintains the Deposit Insurance Fund (DIF), which is the emergency stash for nearly all bank deposits in the Land of the Free.

DIF financial statements show an incredible 54% drop in cash equivalents since last year.

This means the DIF’s immediate liquidity is now just 1.2% of its total assets. In other words, nearly 99% of the insurance fund is tied up in various investments that may lose substantial value in the very financial crises that they’re meant to insure.

The FDIC has stuffed much of the DIF funds in an expanding bond portfolio. Yet by its own admission, this portfolio is down $10 billion, or roughly 14%.

Plus, a good chunk of that bond portfolio has been invested in securities that earn negative interest.

It’s incredible; the organization insuring the US banking system has actually purchased bonds that yield negative interest!

Now, including the losses, the fair market value of the DIF is about $62 billion.

That might sound like a lot of money. But total bank deposits in the US exceeds $13 trillion, according to the Federal Reserve.

This means that the DIF has net assets available to cover less than 0.5% of all bank deposits.

In fairness, the FDIC’s insurance fund doesn’t need to maintain a 100% cash backing of all bank deposits; that’s not how insurance works.

If your home is covered against fire damage for $300,000, the insurance company won’t set aside $300,000 specifically for your home.

Their actuarial tables suggest that the risk of loss is much less than 100%. So they’ll only set aside a fraction of that amount.

And admittedly, the risk of a 100% loss in the banking system is almost zero. They don’t need anywhere near $13 trillion to properly insure it.

But even the FDIC itself acknowledges that their insurance fund is totally insufficient.

For starters, the fund doesn’t come close to meeting the minimum legal reserve requirement that was established by law following the Global Financial Crisis several years ago.

Even more, the FDIC states in its own report that they need TWICE the current reserve balance as “the minimum level needed to withstand future crises of the magnitude of past crises.”

Bottom line, the FDIC has stated in black and white that they are not equipped to deal with another bank crisis.

This is where the government is supposed to come in, with an explicit guarantee to bail out the banks.

The real irony, of course, is that the government doesn’t have any of its own money. They only have your money. Taxpayer money.

So in essence, the government is guaranteeing your bank deposit with your own money. It’s mind boggling.

The larger problem is that the government hasn’t done a good job hanging on to any of your money.

With the Treasury Department’s financial statements showing the US government’s net worth at negative $60 trillion, Uncle Sam is in no position to bail anyone out.

Deposit insurance may have been a well intended idea. But the hard facts show that this blanket guarantee of bank safety is ultimately a ruse.

None of the institutions involved has the financial resources to back up their promises.

So instead of blindly depositing money in a dangerously illiquid banking system and expecting an insolvent government and undercapitalized insurance fund to fix everything, a rational person ought to consider other options.

There are other jurisdictions in the world (like Norway) where the banks are far more liquid and more capitalized, backed up by well-capitalized insurance funds or governments with minimal net debt.

Holding physical cash is an even easier option to reduce this banking system risk; just make sure to avoid high-denomination notes like 500 euros or $100 bills.