this page was first posted in October 2013, last updated October 2014



  Dominica

DOMINICA and our GLOBAL ENVIRONMENT
Once Upon A Time Im The West
Dominica and our Global Environment - home pageAn Introduction to DominicaThe Banana StoryThe Earth - it's place in the solar system, our gallaxy and the universe
we are cooking our planet!corporations rule the worldThe CRIME of FRACKINGinvasions, oil and an assault on our freedoms




Everyone is complaining, not just in Dominica but throughout the region - business is slow, the number of stay-over visitors has fallen and the cruise shippers are holding tightly onto their purse strings. I read recently that tourism in Barbados is down 40% this year. The problem cannot be blamed purely on rising air fares or the dismal service of our local carrier, LIAT, though these elements have surely contributed to some extent.

To understand what is happening today, we have to go back a few decades and examine the western trends that have led to a lack of liquidity in the global financial marketplace, in which the USA is the most influential player. Almost a century ago, corporate and banking excesses lead to what is remembered as the great depression in the USA, following which the Banking Act of 1933, otherwise known as the Glass–Steagall Act was enacted. This Act imposed banking reforms to protect customers, by separating regular banking from speculative banking practices.

When I grew up in the ‘50s and ‘60s, the mixed economy of the UK worked well. The economy was expanding and our standard of living noticeably improved throughout the period. The private sector produced our televisions and motor cars, watches and chocolate bars, whilst the State took care of such things as education, health care, public transport, utilities and roads. An American economist by the name of Milton Friedman came up with a "free market" philosophy, suggesting that all such State run activities should be provided by the private sector and that the private sector would perform best with minimal or "self" regulation. His ideas were eagerly embraced in the '70s by British Prime Minister Margaret Thatcher and by America’s President Ronald Regan. In the decade that followed many State run enterprises in these two countries were privatised, raising extra cash for the government to spend. Less well known is that some of the politicians involved in these privatisations enriched themselves in the process, as their names found their way onto the boards of these newly formed companies. The trend continued through the '80s and '90s even though elections in Britain saw the Conservatives displaced by the Labour Party and across the pond the Republicans replaced by the Democrats. By this time the corporations and banks had begun swallowing each other up and swelling in size, flexing their muscle with lobby groups to influence policy making. The stock market also transformed from merely trading stocks and shares to also trading derivatives (bets on anything and even bets on bets). As the wealthy indulged in the gambling frenzy, more and more deregulation was demanded and towards the end of the Clinton Administration in the USA the Glass–Steagall Act was scrapped in November 1999. This opened the way for the reckless banking practices that have since undermined confidence in our entire monetary system. Times were good and the USA had a surplus of around $6 trillion when Clinton left office in 2000.

What happened next was an acceleration in the process of wealth transfer from the middle and working classes and the public sector to the already exceedingly wealthy 1% of 1% of the population.
9/11 and a few subsequent natural disasters provided "opportunities" for the well connected to exploit using funds from the public purse. Two wars were launched illegally from which privatised military and surveillance contractors also grew fat at the taxpayer's expense. During the first 7 years of the new millennium, the deregulated financial free-for-all led to an epic campaign of predatory lending in the USA, later referred to as the "sub-prime" mortgage scandal. No longer did anyone need an interview to ascertain whether they were a good risk before being granted a mortgage as these mortgage loans were quickly insured, re-insured, disguised, packaged with other financial products, fraudulently given AAA (the safest) rating and traded on Wall Street and around the world. Fuelled by the commissions that the aggressive sellers of these loans generated for themselves, the number of mortgage sales more or less doubled each year, until the game of pass the parcel finally ended with it being opened, to reveal nothing but an uncollectable debt. Repossessions escalated, house prices tumbled and banks and financial institutions gaped into an abyss created by their own reckless behaviour. One sad consequence was that thousands had their homes repossessed both in America and Europe. 

Financial institutions had grown to sizes regarded as "too big to fail" (without bringing down entire economies). Governments justified the use of public money to bail out many of the failing banks to a tune of over $20 trillion worldwide (capitalism for the poor, socialism for the rich). $7 trillion of the bailout was in the USA and with a population of around 350 million that equates to a staggering $20,000.00 per head of population. When George W. Bush left office in 2008 the USA was already about $9 trillion dollars in debt. The bailout was not therefore funded by money sitting in the Treasury, but by money that had to be borrowed from the future, from the tax that will be collected from the public for a great many years to come. In the interim this caused a cash-flow crisis. Elsewhere, the first economy to fail was Iceland, then Britain's Northern Rock Building Society, followed by larger banks, similarly rescued by massive government bailouts. Almost all of the European countries are suffering.
The economy of Greece is close to collapse, relying on the EU to keep afloat. The Cyprus crisis earlier this year saw the savings of individual bank account holders raided in a dreadful precedent demanded by Germany as a precondition to an EU financial rescue package. This is the story of how a bunch of economic bandits in the almost unregulated USA more or less bankrupted not just the USA but, via the conduit linking global stock markets, the whole of the western world! Had there not been willing poker players across the table from the USA to absorb a fat chunk of its debt the US economy may not have survived to tell the tale. 5 years later the economic criminals still walk free whilst the public are punished by austerity measures. Banking reforms are still inadequate, interest on our savings has shrivelled to almost nothing and our accounts are now bombarded by an array of new charges (we wouldn't want our cherished CEOs to go without their million dollar bonuses, would we?).

You might have heard the term "Quantitative Easing" and wondered what it means. In a nutshell, it is the magical creation of digital money, by the Federal Reserve and Central Banks, which is then loaned to their governments at interest and sold on in the form of Government Bonds. When economies fall deep into debt, the only thing that can continue to sustain them is the generation of more debt. Whilst the vaults of many government reserves remain empty and jobs are hard to find, the very wealthy continue to amass more and more wealth. Forbes magazine recently revealed that the 400 richest Americans are now worth $2.3trillion, up from $1.7 trillion last year. That is more than the combined wealth of America's poorest 150 million people!

As America's debt ceiling, last raised in May 2013, approaches once again, (now somewhere between 16 and 17 trillion dollars), the future looks uncertain. However, in Dominica banking and business regulation is less lax, interest rates have remained relatively stable and the property market has not witnessed the violent swings of "boom and bust" experienced in the USA and England. This is probably why the property market is still seeing activity as foreigners and the Dominican Diaspora alike look for a more stable alternative in which to invest their money. Property prices in Dominica are still reasonable compared to, for example, the Virgin Islands, the French Antilles, Barbados, St. Lucia and Grenada. Dominica also has many other positives. Its mountainous terrain, cloaked in forest and veined with rivers, keeps the temperature at a pleasant level all year round. I believe its agricultural sector, although impacted by decades of trade tariffs and massive farm subsidies handed out to farmers in North America and Europe, has a hopeful future. These farm subsidies cannot be sustained for much longer by governments struggling under such heavy debt, at which time Dominica's produce may once again begin to fetch its true value in the open market and this in turn will help to rejuvenate its economy. In addition, living in Dominica is an investment in one’s health. We will never freeze in winter, we have unpolluted air, no shortage of food and clean water. It is for good reason that Dominica boasts the most centenarians in the region. So if you are wondering where would be a suitable location to buy or build a second home Dominica offers a great choice.


Colin A. Lees,  Nature Island Destinations Ltd  http://www.natureisland.com/

'Once Upon a Time in the West' was the title of a 1979 song by British rock group, Dire Straits.

Footnotes:
1.
Following the USA's scrapping of the
Glass–Steagall Act in 1999, the lack of sound regulation allowed speculators within the financial sector to generate large fast profits by questionable means that had been denied them previously. Players within the financial sectors of Britain, Europe and elsewhere looked on with envy, also desiring the means to do likewise. They then pressured their own governments into relaxing the regulatory financial framework within which they operated, using the argument that American financial institutions now had the competitive edge over them. The ploy worked, particularly in the UK, where Chancellor Gordon Brown desired to keep the City of London in the forefront of its competition with New York as the financial capital of the world.

2. Since the end of World War II the USA has enjoyed currency hegemony, with the US$ being the world's reserve currency - i.e. every commodity traded around the world is priced in and traded in US$. In Dominica, our currency is pegged to the US$. In 2008 President Obama inherited a poisoned chalice - a US$9trillion dollar deficit left behind by the outgoing Bush Administration, added to by a US$7trillion bailout (gift of taxpayers money) to the failing private sector financial institutions in reward for their reckless behaviour, thus lifting the deficit to US$16trillion. During the 8 year reign of the Bush Administration, the total overspending of public funds - i.e. tax revenue (including the bank bailout) was in the region of US$22trillion (equivalent to more than US$60,000.00 for every man, woman and child resident in the USA today!). The corporate elite who run the military supermarket enjoyed bumper profits throughout this whole period, continuing into Obama's presidency, and would like to keep their best customer, the US Government, spending there at similar levels for the foreseeable future. The lobby groups are baying, but this is not sustainable.

3. As this publication went to press, the USA's debt ceiling of US$16.69trillion needed to be raised again by 17th October 2013 to prevent a shut-down of Government services it would no longer have the line of credit to fund. The problem will have to be faced again in a few months time and at regular intervals thereafter. Unless corporate and banking regulation is seriously reformed, loopholes closed that allow corporate giants to dodge paying their fair share of tax and spending on the USA's military industrial complex is massively curtailed, it has little chance of restoring a balanced economy or maintaining the strength and stability of its currency. Maybe this is the time that our Eastern Caribbean Central Bank should consider disengaging our EC$ from the US$ and looking at an alternative currency to latch on to, in preparation for a possible US$ crisis.

4. 1 billion = 1,000,000,000.  1 trillion = 1,000,000,000,000.

October 2014 update: One year later, media speculation over breaching the debt ceiling has subsided and been replaced by speculation over when the Fed and Bank of England will raise the base interest rates from their current levels of almost zero. This, however, is just media hype, for the government debt levels have not improved, if anything they have deepened! Anyone with an understanding of basic arithmetic can see that they simply cannot afford to permit any rise at all - raising rates by just one tenth of one percent will increase the annual debt servicing cost on US $17trillion by $17billion, and on Britain's £2trillion by £2billion. To prevent (or at least delay) the collapse in value of our fiat currencies, the bubble has to be kept inflated at any cost - and the only course remaining is to commit more QE, i.e. create more money at the push of a button, which is then pumped into the economy. Unfortunately it is not finding its way to where we really need it - to help small businesses or to the National Health Service, but to financing more war and to the already bloated corporations, to fund crimes like Fracking. This is an absurd process in which water laced with a secret cocktail of toxic chemicals is pumped into the ground to release a little natural gas, costs more to implement than the value of the fossil fuel extracted, contaminates our drinking water, triggers earthquakes and leaves a trail of environmental degradation in its wake. The CEO's get fat whilst their outfits operate at a loss. The "Old Boys" network is alive and well! 



related viewing
Inside Job - dvd 2010 documentary
This Academy Award winning film (2010) by Charles Ferguson exposes the shocking truth behind the economic crisis of 2008. The global financial meltdown cost of over $20 trillion, resulting in millions of people losing their homes and jobs. Through extensive research and interviews with major financial insiders, politicians and journalists, Inside Job traces the rise of a rogue industry and unveils the corrosive relationships which have corrupted politics, regulation and academia. Available on dvd from 
MELTDOWN documentary - watch on YouTube
A well researched HBO television documentary that examines in detail the trends, not only in the USA but worldwide, which led to the financial crisis in 2008. Watch the full movie on   watch MELTDOWN on YouTube
removed from YouTube - watch trailer only
A well cast drama (2011) starring James Woods as Dick Fulds, head of Lehman Brothers, William Hurt as Treasury Secretary Hank Paulson, Billy Crudup as Timothy Geithner, head of the NY Federal Reserve and Paul Giamatti as Fed Chairman Ben Bernanke. A behind the scenes look at the companies and personalities embroiled in the unfolding scenario of the USA's financial crisis, leading ultimately to the massive ($7trillion) bailout, using public funds, to save the failing financial institutions from collapse on the eve of Barack Obama's Presidency in late 2008.      Available on dvd from order from Amazon, trailer only remains on watch TOO BIG TO FAIL on YouTube (trailer only)
Richard Wolff, Economics Professor
Richard Wolff is interviewed on 25th March 2013 by the American daily news program Democracy Now! on America's economic problems and ways to correct them (click on image). He is professor emeritus at the University of Massachusetts, Amherst, now at New School University, and author of a number of books, including Democracy at Work: A Cure for Capitalism. Democracy At Work - A  Cure For Capitalism (2012) order from Amazon
Democracy Now!, a daily news hour funded by public donations
CAPITALIAM - a love story by Michael Moore
CAPITALISM a love story (2009).
Michael Moore is an American from a working class background in an industrial town called Flint. He looks at the disruption brought about by corporate USA from the point of view of those at the bottom of the ladder, who are all to often exploited then discarded.

Available on dvd from order from Amazon, or watch the full movie on watch CAPITALISM - a love story on YouTube
OVERDOSE The next financial CRISIS 2010 documentary
OVERDOSE The Next Financial CRISIS (2010)
This excellent documentary examines the root causes of the last financial crisis from a Swedish perspective. At
such critical times people seek strong leaders and simple solutions. But what if their solutions are identical to the mistakes that brought about that very crisis? This is the story of the greatest economic crisis of our age, the one that awaits us.    
Available on dvd from order from Amazon, or watch the full movie on watch OVERDOSE - The Next Financial Crisis on YouTube
FOUR HORSEMEN - British made documentary 2013
FOUR HORSEMEN (2013) 
This excellently presented British documentary, conceived and directed by Ross Ashcroft, looks at the flawed system that permitted the conditions for corporate monopolies to avoid tax and accountability, deregulated banksters to wreak financial havoc,
wealth gap to break all records and a privatised military that encourages war - all this whilst trashing our planet in the process. 23 of today's controversial thinkers propose ways we could change to redress the balance.     Available on dvd from order from Amazon, or watch the full movie on watch FOUR HORSEMEN on YouTube
Keiser Report 633 30 Aug 2014. This show is aired 3 times weekly on rt.com
In this edition of the Keiser Report, Stacy Herbert and Max Keiser reveal not only how use of the English language is engaged to disguise financial fraud and those affected by it, but also how the wealthy elite routinely manipulate the markets, help corporate clients commit tax fraud and even bankrupt entire economies by insider trading and wash trades in a derivatives market that facilitates trades many times larger than the value of the stock.

This editorial was written for the October 2013 edition of

Dominica's Safe Haven Real Estate property magazine.
The Safehaven teamSafe Haven Real Estate was fashioned on the English model and has its outlet on the Roseau Bayfront, between the Post Office and the Magistrates Court. It has a permanent core of loyal and dedicated staff, several of whom have been with the company since its inception in 1999.
Cecily Lees, co owner and MD is a London trained lawyer
Kathlyn St Hilaire, secretary and telephonist
Danna Delsol, property manager
Vernel Christopher, assistant property manager
Colin Lees, digital photography + graphic design
Ken Tyson, retired building inspector, shows property
Eddison Jones, econominst and former building inspector, shows property
SAFEHAVEN REAL ESTATE - 2013 property magazine, cover photo by Dominic Lees

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link to Nature Island Destinations Nature Island Destinations has, since 1997, provided an island-wide information and booking service for Dominica's stay-over visitors - accommodation including private rentals, vehicle hire plus selected hikes and tours.
link to Safehaven Real Estate Safe Haven Real Estate is the most professional and successful realtor in Dominica. Based on the UK model, it has a retail outlet, inhouse lawyer, core of permanent staff and a website which is updated daily.