The interesting bit about local bankers selling government debt in a non-convertible domestic currency, is that it sometimes escapes the eye of the foreign ratings agencies, and some ratings agencies discount or even ignore B$ debt which has no effect on foreign reserves. So they (the government and the Bankers) gladly serve up another tranche of debt to the poor suckers who haven't figured out how to convert Bahamian dollars to the hard currency of American dollars. Buying this debt (if you are a businessman who has accumulated a pile of Bahamian dollars), is the only way to get a decent return on your money.
Most "smart" business men that I know, convert some of their money to American, and have nominee suppliers in Florida that supply them and must be paid by American Dollar currency transfer with full approval by the Central Bank. If you look at the beneficial ownership of these nominee suppliers, you don't have to go very far.
Exactly. Why would anyone waste expensive gas to burn garbage at the dump? A little bit of gas and fire will save a lot of gas for the bulldozers burying the crap. Just like in the restaurant business, a little arson can go a long way to improve the bottom line. The owners are arson around on this one.
Bahamians do not have access to investment capital to be more active financially as you put it. The Bahamian dollar is non-convertible, meaning that it doesn't not trade on the open market and it not a hard currency that can be spend around the world.
The dollar is propped up with reserves of American dollars, and as a result, Bahamians need to go through the Central Bank to get access to hard currency or to export or import currency. The Central Bank limits the amount of Bahamian currency that you can convert for external investment to prevent currency out flows.
So if you are importing a huge amount of goods, say to build a hotel, the only way that you can pay for it, is to pay for it in a hard currency like American dollars, and for that, you need to either generate American dollars with your business, or you need Foreign Direct Investment with people who do have hard currency to lend to you or to become your partner. Those people end up owning the economy of the Bahamas.
There is one way to cure that -- and that is to get rid of the Bahamian dollar. It is called dollarising the economy, where the American dollar becomes the official currency.
Politicians want to keep the Bahamian dollar as a matter of pride, but it actually keeps the citizens of the Bahamas at a disadvantage. At one time, the Bahamian dollar was convertible on the open market, but that changed when the Currency Board was eliminated with a rising national debt. If you have a convertible dollar, you need close to 1 American dollar for every Bahamian dollar, and the government spent money it didn't have like water, and keeping a closed currency requires only a bit of reserves, so that is the way that the government went.
Dollarising the economy would cause chaos initially, but ultimately it would empower all Bahamians.
>“I’m optimistic that over time most of these things will work themselves out.” - James Smith
Mr. Smith is talking out of both side of his mouth. In one breath, he says that the problems are structurally, and then he says the problems will work themselves out.
If a problem is structural, it will not *work itself out* . Structural means that the system is at fault. Nothing will cure the system except a huge paradigm shift that will alter the structure to create enough jobs so that things will change.
Where will that change come from? It will not happen by itself. The current government has tunnel vision from having its head buried in its distal orifice of its alimentary canal, and James Smith is but a poor apologist for the PLP having once ineffectively served as junior Finance Minister.
The single largest demographic segment of the Bahamian population are the young people, and the monolithic economy is moribund. It must be growing to absorb the influx of young people entering the workforce, and it is not. On top of that, the school leavers entering the workforce do not have the skills to be valuable workers. Again, I would challenge Mr. Smith to elucidate on the mechanism of how these structural deficiencies will "work themselves out".
It is impossible to provide remedial education to the thousands of people out there looking for work. If one were to magically entice an industry to move to the Bahamas (one that doesn't need a reliable source of electrical energy and cheap imports of raw materials -- if an industry such as this exists), then there still would be the problem of an ineffectual workforce.
It doesn't take brains to see that the educational system turns out strong backs and weak minds, fit only for carrying bags or washing floors, but even Baha Mar will not put a dent into the numbers of unemployed youth.
If Mr. Smith is the best we have as an economic pundit and advisor, then God help us all. His optimism is irrational and unwarranted, and as usual, real solutions are few and far between. His government doesn't have the reproductive glands or the brains to fix the problem.
So where are the Bahamian regulators in all of this? Where were they for Warren Davis, Gibraltar, Calendonia, Benchmark, Alliance, Dominion Securities .... the list goes on? Are the regulators just a fee collection agency? A paper tiger?
We have had SMART Fund frauds, pump and dump, Nicholas Battoo shenanigans. One would think that the regulators would stop being slack and do their jobs after the first couple of fiascos.
Time for Wendy Craigg and Hillary Deveaux to resign.
As George Herbert Walker Bush said "It's the economy, stupid.".
If you examine the murders, the largest represented demographic is the 20-30 year old male. That male has no fixed method of income generation. He is functionally illiterate and speaking "Bahamianese" instead of the Queen's English. He is challenged in math literacy, or any other kind of literacy against a benchmark of peers. There's a greater than 75% chance that he was raised by a single mother and has siblings who are not of the same father. He is probably part of a gang of similar males. He has used marijuana and other drugs.
By way of mass media, he was inculcated into the rap culture of "Get Rich or Die Tryin'" as rapper Fifty Cent put it. He has no past -culture and family value programming has bypassed him. He has no future. He sees the American Dream everywhere, including the millions of tourists who descend in the Bahamas, or hide their wealth here, and has no way of achieving it.
The monolithic economy is that of bed-makers, chambermaids and bell men and there is no escape. The education system is sub-standard. Both pillars of the economy -tourism and financial services are declining. There is no hope for reversal, because tourism as a product has moved on into experiential tourism (like zip-lining in the tropical forest canopy, or in Vegas, riding in a Venetian canal and gondola without going to Venice etc) and the Bahamas tourism product is the same tired 1960's sand, sea and gambling.
Financial services is declining due to the demise of the international tax shelter, and the practitioners are left scrambling picking up the crumbs in the less developed emerging nations which is an unsustainable model.
Unemployment is swelled by the ranks of 3,000+ school leavers every year, with no where to employ these people with virtually no marketable job skills. The knowledge economy has not even emerged here. The concept of a free economic zone with the Hawksbill treaty is fettered by a 1950's model that doesn't understand the global economy, global village and new operating paradigm of openness, and mutual cooperation. They are, as a prominent attorney put it, merely a collection agency cutting steaks off their racehorses, and they too will die, taking with them another lost opportunity.
So with all of that, and a new VAT along with existing taxes, we are taxed more than a country with income tax and sales tax. Our standard of living is steadily declining. The socio-economic fabric is fraying. Our government is a corrupt kleptocracy. The churches are all concerned about their own wealth, and every single moral compass in the Bahamas is skewed.
And so do we really need a lot of navel-gazing as to why there is crime? The answers are in front of us. The solutions need probity, altruism, patriotism, common sense, hard work and enlightenment. Every single one of those parameters is missing in this country. So crime will continue unabated.
What world does Michael Anderson live in? I would suggest that he drive down East Street for the first time in ten or twenty years. And this guy is looking for investment money based on his prognostications?
Yes the American economy is recovering. The Canadian economy dips because of resource issues like the low price of oil, but can be offset by strong sectors such as knowledge based and manufacturing industries. Europe is a mixed bag.
None of this will trickle down to the Bahamas. The latest figures show that only 17% of the tourists even get off the cruise ships in the Bahamas. Airlift is deteriorating. Financial services is in a freefall in the Bahamas. The economy is moribund. VAT will be an anchor. The government doesn't know how to balance a budget and fiscal and monetary policy is non-existent run on an ad-hoc basis by a brain-dead Prime Minister who is also the finance minister and doesn't have a clue about economics.
The economy is on a downward trajectory and there are no market forces to stop it. The fundamentals and technicals are in an overall negative state. Every summer, 3,000+ school leavers enter the job market. Baha Mar is supposed to be a great hope, but they will have trouble filling rooms with a tired tourism product.
Again, I ask, what world does Michael Anderson live in? If there is a real parallel universe that he inhabits, I would like to join him. If it's a Bob Marley life-style, then perhaps he can be excused for his grandiose pronouncements, but they shouldn't get the ink that they do.
banker says...
The interesting bit about local bankers selling government debt in a non-convertible domestic currency, is that it sometimes escapes the eye of the foreign ratings agencies, and some ratings agencies discount or even ignore B$ debt which has no effect on foreign reserves. So they (the government and the Bankers) gladly serve up another tranche of debt to the poor suckers who haven't figured out how to convert Bahamian dollars to the hard currency of American dollars. Buying this debt (if you are a businessman who has accumulated a pile of Bahamian dollars), is the only way to get a decent return on your money.
Most "smart" business men that I know, convert some of their money to American, and have nominee suppliers in Florida that supply them and must be paid by American Dollar currency transfer with full approval by the Central Bank. If you look at the beneficial ownership of these nominee suppliers, you don't have to go very far.
On New Gov’t bond: $42.5m coming to market next week
Posted 22 January 2015, 5:06 p.m. Suggest removal
banker says...
This comment was removed by the site staff for violation of the usage agreement.
On CIBC eyes staff tripling at new business unit
Posted 22 January 2015, 4:58 p.m.
banker says...
Exactly. Why would anyone waste expensive gas to burn garbage at the dump? A little bit of gas and fire will save a lot of gas for the bulldozers burying the crap. Just like in the restaurant business, a little arson can go a long way to improve the bottom line. The owners are arson around on this one.
On City dump catches fire again
Posted 20 January 2015, 10:59 a.m. Suggest removal
banker says...
Hello pat242
Bahamians do not have access to investment capital to be more active financially as you put it. The Bahamian dollar is non-convertible, meaning that it doesn't not trade on the open market and it not a hard currency that can be spend around the world.
The dollar is propped up with reserves of American dollars, and as a result, Bahamians need to go through the Central Bank to get access to hard currency or to export or import currency. The Central Bank limits the amount of Bahamian currency that you can convert for external investment to prevent currency out flows.
So if you are importing a huge amount of goods, say to build a hotel, the only way that you can pay for it, is to pay for it in a hard currency like American dollars, and for that, you need to either generate American dollars with your business, or you need Foreign Direct Investment with people who do have hard currency to lend to you or to become your partner. Those people end up owning the economy of the Bahamas.
There is one way to cure that -- and that is to get rid of the Bahamian dollar. It is called dollarising the economy, where the American dollar becomes the official currency.
Politicians want to keep the Bahamian dollar as a matter of pride, but it actually keeps the citizens of the Bahamas at a disadvantage. At one time, the Bahamian dollar was convertible on the open market, but that changed when the Currency Board was eliminated with a rising national debt. If you have a convertible dollar, you need close to 1 American dollar for every Bahamian dollar, and the government spent money it didn't have like water, and keeping a closed currency requires only a bit of reserves, so that is the way that the government went.
Dollarising the economy would cause chaos initially, but ultimately it would empower all Bahamians.
On Fred Mitchell clarifies communication made in Parliament
Posted 18 January 2015, 5:07 p.m. Suggest removal
banker says...
>“I’m optimistic that over time most of these things will work themselves out.” - James Smith
Mr. Smith is talking out of both side of his mouth. In one breath, he says that the problems are structurally, and then he says the problems will work themselves out.
If a problem is structural, it will not *work itself out* . Structural means that the system is at fault. Nothing will cure the system except a huge paradigm shift that will alter the structure to create enough jobs so that things will change.
Where will that change come from? It will not happen by itself. The current government has tunnel vision from having its head buried in its distal orifice of its alimentary canal, and James Smith is but a poor apologist for the PLP having once ineffectively served as junior Finance Minister.
The single largest demographic segment of the Bahamian population are the young people, and the monolithic economy is moribund. It must be growing to absorb the influx of young people entering the workforce, and it is not. On top of that, the school leavers entering the workforce do not have the skills to be valuable workers. Again, I would challenge Mr. Smith to elucidate on the mechanism of how these structural deficiencies will "work themselves out".
It is impossible to provide remedial education to the thousands of people out there looking for work. If one were to magically entice an industry to move to the Bahamas (one that doesn't need a reliable source of electrical energy and cheap imports of raw materials -- if an industry such as this exists), then there still would be the problem of an ineffectual workforce.
It doesn't take brains to see that the educational system turns out strong backs and weak minds, fit only for carrying bags or washing floors, but even Baha Mar will not put a dent into the numbers of unemployed youth.
If Mr. Smith is the best we have as an economic pundit and advisor, then God help us all. His optimism is irrational and unwarranted, and as usual, real solutions are few and far between. His government doesn't have the reproductive glands or the brains to fix the problem.
On Poverty breeds 35% ‘no graduate’ rate
Posted 16 January 2015, 9:51 p.m. Suggest removal
banker says...
So where are the Bahamian regulators in all of this? Where were they for Warren Davis, Gibraltar, Calendonia, Benchmark, Alliance, Dominion Securities .... the list goes on? Are the regulators just a fee collection agency? A paper tiger?
We have had SMART Fund frauds, pump and dump, Nicholas Battoo shenanigans. One would think that the regulators would stop being slack and do their jobs after the first couple of fiascos.
Time for Wendy Craigg and Hillary Deveaux to resign.
On Bank’s unwitting role in multi-million fraud action
Posted 15 January 2015, 4:06 p.m. Suggest removal
banker says...
As George Herbert Walker Bush said "It's the economy, stupid.".
If you examine the murders, the largest represented demographic is the 20-30 year old male. That male has no fixed method of income generation. He is functionally illiterate and speaking "Bahamianese" instead of the Queen's English. He is challenged in math literacy, or any other kind of literacy against a benchmark of peers. There's a greater than 75% chance that he was raised by a single mother and has siblings who are not of the same father. He is probably part of a gang of similar males. He has used marijuana and other drugs.
By way of mass media, he was inculcated into the rap culture of "Get Rich or Die Tryin'" as rapper Fifty Cent put it. He has no past -culture and family value programming has bypassed him. He has no future. He sees the American Dream everywhere, including the millions of tourists who descend in the Bahamas, or hide their wealth here, and has no way of achieving it.
The monolithic economy is that of bed-makers, chambermaids and bell men and there is no escape. The education system is sub-standard. Both pillars of the economy -tourism and financial services are declining. There is no hope for reversal, because tourism as a product has moved on into experiential tourism (like zip-lining in the tropical forest canopy, or in Vegas, riding in a Venetian canal and gondola without going to Venice etc) and the Bahamas tourism product is the same tired 1960's sand, sea and gambling.
Financial services is declining due to the demise of the international tax shelter, and the practitioners are left scrambling picking up the crumbs in the less developed emerging nations which is an unsustainable model.
Unemployment is swelled by the ranks of 3,000+ school leavers every year, with no where to employ these people with virtually no marketable job skills. The knowledge economy has not even emerged here. The concept of a free economic zone with the Hawksbill treaty is fettered by a 1950's model that doesn't understand the global economy, global village and new operating paradigm of openness, and mutual cooperation. They are, as a prominent attorney put it, merely a collection agency cutting steaks off their racehorses, and they too will die, taking with them another lost opportunity.
So with all of that, and a new VAT along with existing taxes, we are taxed more than a country with income tax and sales tax. Our standard of living is steadily declining. The socio-economic fabric is fraying. Our government is a corrupt kleptocracy. The churches are all concerned about their own wealth, and every single moral compass in the Bahamas is skewed.
And so do we really need a lot of navel-gazing as to why there is crime? The answers are in front of us. The solutions need probity, altruism, patriotism, common sense, hard work and enlightenment. Every single one of those parameters is missing in this country. So crime will continue unabated.
On A life of crime - join the discussion
Posted 14 January 2015, 11:20 a.m. Suggest removal
banker says...
The sad part is that 75% of Bahamians think that this is a serious piece. And 95% of PLP supporters believe it.
On Young Man's View: The Bahamas in 2015 as seen by the PM (according to Adrian Gibson)
Posted 14 January 2015, 9:48 a.m. Suggest removal
banker says...
What world does Michael Anderson live in? I would suggest that he drive down East Street for the first time in ten or twenty years. And this guy is looking for investment money based on his prognostications?
Yes the American economy is recovering. The Canadian economy dips because of resource issues like the low price of oil, but can be offset by strong sectors such as knowledge based and manufacturing industries. Europe is a mixed bag.
None of this will trickle down to the Bahamas. The latest figures show that only 17% of the tourists even get off the cruise ships in the Bahamas. Airlift is deteriorating. Financial services is in a freefall in the Bahamas. The economy is moribund. VAT will be an anchor. The government doesn't know how to balance a budget and fiscal and monetary policy is non-existent run on an ad-hoc basis by a brain-dead Prime Minister who is also the finance minister and doesn't have a clue about economics.
The economy is on a downward trajectory and there are no market forces to stop it. The fundamentals and technicals are in an overall negative state. Every summer, 3,000+ school leavers enter the job market. Baha Mar is supposed to be a great hope, but they will have trouble filling rooms with a tired tourism product.
Again, I ask, what world does Michael Anderson live in? If there is a real parallel universe that he inhabits, I would like to join him. If it's a Bob Marley life-style, then perhaps he can be excused for his grandiose pronouncements, but they shouldn't get the ink that they do.
On ‘I’ve never seen it more positive for the Bahamas’
Posted 14 January 2015, 9:11 a.m. Suggest removal
banker says...
Sigh, pirates of the Bahamas again. More reasons why not to trust Bahamian Financial Services. Another black eye in the world marketplace.
On Bahamian bank sued on $8.7m ‘total loss’
Posted 14 January 2015, 9:01 a.m. Suggest removal