More thoughts from Tradewinds

In our Bahamas, VAT is a major disincentive to capital formation (investment) which creates real growth, and without capital formulation, employment becomes stagnant and then declines.. Unemployment is like a Social Vice that forces people into expanding levels of poverty and often turns basically decent people to shoplifting and stealing..

Moral and social decline are the direct result of this Very Awful Tax which is destroying the dreams of our youth as economic stagnation and deflation silently takes over our once proud but fragile economy..

As there is no quick and meaningful economic cures for Stagflation, potential recovery will be extremely painful, long and drawn out.. We are witnessing this with the current demise of Europe and soon Japan will financially collapse.. Finally the mighty United States, the largest debtor in the history of mankind, will become insolent and crash into bankruptcy..

These conditions over the next few years will have a massive and negative impact upon trade, manufacturing, financial services as well as tourism.. Governments will aggressively respond to such recessionary conditions by introducing oppressive trade restrictions and higher protective tariffs.. Bank Holidays and even failures cannot be ruled out.. Harsher and more restrictive capital and exchange controls will further depress economic conditions as businesses, hotels, retailers and construction companies will be forced to close from declining economic activity.. It has happened before in the 1930's and it can happen again as historical economic cycles always tend to repeat themselves..

Lets hope our government is anticipating and preparing for his economic storm that is just over the horizon.. The Bahamian Dream must be nourished and kept alive.. Prudent fiscal policies must be introduced across the board and incentives must be put into place to encourage greater savings and investment to prop up the banking system..

Simply put, there will be hell to pay for the unprepared as the mountains of debt comes crashing down leaving nothing but financial destruction and economic devastation in the aftermath.. Governments must not let this happen as it could take decades to hopefully recover..

Better to be prepared than to be sorry..