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A GROWTH INDUSTRY

Ridiculed at its inception, nobody can now deny the influence bottled water has had on society. A massive growth in popularity at the end of the millennium sent sales soaring, and gigantic profits have been reaped for years. But has the global financial crisis changed all of that? Are we seeing the beginning of the end for bottled water?

Natural mineral springs were historically popular back in the preceding centuries, although the popularity was derived from the reputed health benefits and healing effects one could gain. Naturally, people saw an opportunity to bottle the water and sell it to customers who could not make the journey to the springs.

Nowadays, bottled water customers choose to drink it for entirely different reasons, with surely none believing that is it a magical cure for disease. Many of these consumers have been caught up in the heavy marketing campaigns of the 80’s and 90’s, which are continuing to this day. Critics of bottled water still remain as well and must surely be pleased with the dwindling bottled water sales of recent times.

For the past 30 years, bottled water consumption has grown by around 12% each year. Last year it became the third most popular drink in the US behind soda and milk, with about 70% of consumers admitting they purchase the water. Over that time the bottled water companies were making massive profits, as the bottles of water only cost a few cents to manufacture, yet are sold for more than the price of petrol.

WHY DRINK BOTTLED?

So how did consumers get hooked on buying bottled water when it costs hundreds or even thousands times more than water from the tap? Many consumers prefer the taste of bottled water over the chemical cocktail called tap water, but ultimately it was the fact that consumers want to drink water that is safe which sparked the growth in bottled water sales.

An interesting survey of American bottled water drinkers in the 90’s confirmed these figures, with almost half of respondents confirming their consumption was due to concerns over tap water quality. Less than 10% each chose taste and convenience for their reasons, with most of the remainder of respondents saying they just drank it as an alternative to junk soft drinks.

Many consumers made the switch from tap water to bottled water after numerous news reports of crises involving municipal water supplies and the ‘infection’ of drinking water with deadly organisms. They also became aware of the fluoride con job that the governments had been using for years; finding out that fluoride actually worsened tooth decay, as well as lowering IQ, weakening bone strength and having a disastrous effect on the brain, endocrine and immune systems.

Outside of the home, trust was lost in restaurant tabled water after numerous individuals became violently ill after visiting dodgy restaurants. When knowledge of soft drinks containing poisons such as aspartame did the rounds, bottled water became the beverage of choice when out dining. Travellers also found bottled water handy, especially when overseas in third world countries. The fitness craze also played its part in the bottled water boom.

BOTTLED WATER – NO, NO, NO

The movement against bottled water is gaining momentum and seems to be fuelled by four main segments of society. The environmentalists have been making noise for years and they have now found a formidable ally in the form of the ‘money savers’. The global financial crisis has led many people, businesses and government departments to rethink their spending habits, with bottled water being one of the first expenses cut.

Big businesses who were previously affording the luxury of bottled water or in-office water dispensers have been quick to slash bottled water expenditure from their budgets. The same can be said for many government departments across the globe, although this could be partially influenced by political agendas. Yes, the government is undoubtedly another segment of society against bottled water, albeit for a different reason. They much prefer the public to be taking their fluoridated water, which is said to numb the minds of drinkers and make it easier for them to be controlled.

Ironically, the fourth segment of society voicing a negative opinion of bottled water, are many of the same health fanatics who spearheaded the bottled water movement. Recent scientific studies have shown that bottled water can be extremely dangerous due to chemicals from the plastic leaching into the water. The chemicals are known carcinogens and the leaching can be stimulated by exposing the bottle to sunlight, putting it in the freezer or from moderate heat; such as when it sits in the back of trucks on their delivery routes in the summer.

ENVIRONMENTAL IMPACT

The environmentalists have long been pushing for an extreme reduction or even a ban on bottled water sales in developed countries. They claim that enormous damage is being done to the environment, both in the form of waste from the empty bottles and the use of oil to manufacture them. These were facts that the small town of Bundanoon in NSW were aware of, and they recently took the step of banning all bottled water from the town.

To put the environmentalists claims in perspective, the oil needed to make just the plastic bottles for the US bottled water consumption each year could instead be used to make petrol and run over one million cars. Then there is the additional oil wasted to provide fuel for the transportation and delivery of the bottles, with many of the brands being exported from their source countries.

We would be lucky if even 10% of empty bottles are recycled, as most are instead thrown in the trash and end up stockpiling in the rubbish dumps. But even worse are the copious amounts of plastic that find their way into our oceans. Plastic is known to break down at a higher rate in the ocean and the toxic chemicals released from it are being absorbed by ocean life. We are already suffering from eating fish laced with high amounts of heavy metals and now there is a new threat to our health from the seas.

It is important to remember that some of the criticisms levelled by the environmentalists are definitely biased against the bottled water industry. The plastic waste produced by the soft drink industry makes the bottled water figures pale into insignificance. Many other industries are brutal environmental polluters with plastic, yet are left alone. They have also failed to recognise that a large number of sales today are made by travellers at convenience stores who have no access to a tap, let alone one with safe drinking water.

GOING DOWN

Food and beverage giant Nestle reported that its numerous brands of bottled water are the only sector that experienced a decline in profits this year. Other bottled water manufacturers have also faced the same fate, including another big bottled water company, PepsiCo. In fact, in the US, this last year has been the only year this millennium where bottled water consumption has fallen.

For years there have been many people disgusted by bottled water and have called it a scam. It seems they may have been correct all this time, with many companies being caught out selling treated water from municipal sources. Pepsico was doing this with their Aquafina brand and Coca Cola suffered major embarrassment and was forced to pull out of the UK market over the scandal involving its Dasani bottled water line. Many consumers have been left wondering if bottled water is really any better than tap water.

Another factor is causing consumers to make the switch from bottled water back to tap water. Water filters are increasing in popularity, as technological advances are now making filtered tap water even better quality than bottled water. They used to be expensive and inefficient, but the prices are reducing and some filters can even remove that pesky poison known as fluoride. With filters costing just a fraction of the cost of drinking bottled water and being released in portable bottle version, sales of bottled water are sure to keep falling over the next few years.

But diners and travellers will still be left as customers and for these the industry must get behind a recycling program to quieten the noise from environmentalists. For example, 50c could be added to the price of each bottle of water, with it being refunded when handed back to a recycling centre. Even if people are too lazy to take them back, it is a nice reward for the homeless to scavenge through bins and collect the waste. Saving the environment and feeding the needy at the same time. Maybe there is life yet for the bottled water industry.

ARE THERE ANY SAFE BANKS LEFT?

Over the last few years we have been hit hard by the ‘global financial crisis’ and the ‘credit crunch’, for which the blame has generally been poured upon the banks and their ridiculous schemes such as ‘credit default swaps’. It is highly unlikely that the words ’safe’ and ‘bank’ would have been used in the same sentence over this period of time.

But this is exactly what we are hearing now, as Global Finance has released its list of the 50 safest banks in the world. Yes, they still believe there are some safe banks left out there. To the people at Global Finance – please forgive the rest of us if we are sitting around scratching our heads as to how you managed to find enough banks in today’s economic climate to complete your list.

Following the tremendous financial turmoil seen in the last couple of years, releasing the details of the world’s safest banks isn’t such a bad idea at all. After all, the question of “which banks are safe?” is surely one that most people would want answered.

Global Finance has been compiling the list annually for the last 17 years, although the present disastrous economic situation has brought about the need for the list to be published mid-year for the first time.

The safety rankings are determined by analysing both the banks total assets owned and long-term credit ratings from Moody’s, Standard & Poor’s and Fitch. The analysis was performed on the largest 500 banks in the world.

MOVERS AND SHAKERS

Unsurprisingly, the mid-year list has seen a massive shake-up since the previous release. The big movers have been the banks with a limited appetite for risk, which has correlated into a stronger financial performance than banks which previously ran riot with little or non-existent risk management. Big name banks to fall out of the top 50 include Bank of America, Citi and Barclays.

At the top end of town, there were a couple of new entrants to the lists top 10. Spain’s Banco Santander has jumped to 9^th place, while the Royal Bank of Canada scraped into 10^th position. The first eight places were dominated by banks from just three countries, detailing the banking strength in those nations.

The German government owned KfW was rated as the world’s safest bank, while Germany also had the worlds 4^th, 6^th and 7^th safest banks. With four of the top seven listings, Germany is clearly considered to be the safest place in the world to bank. Banks from France held the 2^nd and 8^th positions, while a couple from the Netherlands occupied the 3^rd and 5^th ranks.

Following on from their top 10 placing’s, banks from Spain and Canada also took the 13^th, 14^th and 17^th positions on the list, with the Big Four banks from Australia filling the other positions in-between. This meant that the world’s seventeen safest banks were situated in six countries, with Australia and Germany having each four listed.

The full tally of countries and the number of banks featuring in the world’s fifty safest banks list can be seen below:

Overall, Germany and France had six banks in the top 50, with Spain, Canada and the U.S. having five each. None of the five U.S. banks made it into the top 20 though. Netherlands did not have any more representatives on the list besides the two which featured in the top 5. There were also a couple of surprises in the list, such as New Zealand’s ASB bank at 18 and banking nation powerhouse Switzerland having its first of two representatives, UBS, come in at a lowly 44^th position.

WHICH BANK IS THE SAFEST IN AUSTRALIA?

The National Australia Bank (NAB) was Australia’s highest ranked bank, falling just short of the top 10 at 11^th place. The Commonwealth Bank (CBA) was 12^th, closely followed by ANZ in 15^th and Westpac in 16^th positions. While this might appear that the NAB has won the race, in reality it is not all that clear cut.

All four banks have almost exactly the same credit ratings with all three credit rating companies. Standard & Poor’s has given each of them an AA rating, while Moody’s has given them all Aa1. The only difference has come from Fitch, with the two highest ranked banks receiving an AA rating, compared to an AA- rating for the other two.

The main deciding factor as to the ranking placements was the asset levels of the banks. NAB topped the charts with $525 billion, followed by CBA with $469 billion, ANZ at $377 billion, and Westpac holding a respectable $351 billion in assets. The asset levels are all substantial, but don’t really take into account the banks liabilities or potential losses from overexposure in a soon to collapse housing market.

The two Australian list leaders currently dominate the housing loans market, meaning that they make be taking on riskier loans in order to gain a higher market share. If ANZ and Westpac are lagging behind due to better risk management, we may see them advancing above the NAB and CBA when a housing collapse occurs. Even if a housing collapse occurs, all four banks are well asset backed and capable of riding out the trough. You can consider your money safe with either of these four banks, and for that matter, probably all other Australian banks too.

TELL ME MORE

Norfolk Island is a small island located off the east coast of Australia. Its total area is just below 36 square km and the island is renowned for its pleasant weather. The monthly maximum temperature averages float between 18 and 24 degrees, while the minimums range from 13 to 19, meaning that the temperature variations are minimal.

The island is covered by the Norfolk Island pine and has a wide range of bird species. Cows roam freely and act as the local lawnmowers, but apart from this there is a distinct lack of creature variety. This isn’t such a bad thing as many bug species are simply non-existent and there isn’t a single snake to be found.

For a long time, it was one of three countries or territories to not have mobile phones in operation, with the others being the Falkland Islands and Western Sahara. There was a proposed cellular service back in 2002, but this went to referendum and the islanders rejected the idea in August that same year. Unfortunately the mobile phones have made their way onto the island in the last couple of years.

Norfolk Island is not totally backwards, with landline phone and internet services being widely available. Both Westpac and Commonwealth Bank maintain branches on the island, and they have adopted the New South Wales education system, with classes running up to and including Year 12. Christianity is the predominant religion, with a wide number of denominations being represented.

POLITICAL BACKGROUND

It is classed as part of Australia even though the island is situated closer to New Caledonia, which is almost directly north, and New Zealand to the south-east. Apart from travel by ships, the island can be accessed through plane flights leaving from Sydney, Brisbane, Melbourne and Newcastle. From the east coast, the time difference is 1.5 hours.

Due to its classification as an Australian external territory, the flights leave from the international airport, but no separate visas are required for Australian citizens or Australian visa holders. Australian customs and quarantine laws do not extend to Norfolk Island either.

The island currently holds the status of a self-governing territory of Australia, which technically means it is a not a territory of Australia but rather a territory under its control. However, this is disputed by some locals who claim that it was granted independence when Queen Victoria granted permission for Pitcairn Islanders to resettle on the island.

A nine member Legislative Assembly has the power to legislate the island and is elected by the islands residents. Commonwealth laws apply only where they are expressed to do so, but the Australian government has recently considered taking full control of the island and forcing the full spectrum of their law onto the island.

HISTORY

Norfolk Island was discovered by Captain Cook in 1774 and it was quickly realised that if the British didn’t colonise the island, then the French would. Six women and nine men convicts were chosen along with seven free men to establish the first colony on the island in 1788. There were remnants of a previous occupation such as stone tools and those inhabitants were believed to have come from New Zealand or islands north of New Zealand, although there was no explanation for their disappearance.

More shipments of convicts would follow as the islands population expanded, but the harsh treatment of the convicts and their unwillingness to work led to the island being abandoned in 1814. All of the buildings were burned down and a dozen dogs were left to kill all the remaining cattle and pigs, and eventually themselves.

In 1825, the government decided to colonise Norfolk Island again, but this time as a hard line place of incarceration. The term ‘hell in paradise’ was coined to describe the living situation on the island. The bishops’ cries against the harsh treatment of prisoners were eventually heard, with the colony being abandoned once again in 1854.

Meanwhile, a community was established on the smaller Pitcairn Island, which came about as a result of mutiny on the Bounty. With the island space running out for the growing community, they appealed to Queen Victoria for assistance in finding another home. She granted them Norfolk Island and in 1856, the whole 194 inhabitants of Pitcairn Island made the journey to settle on Norfolk Island.

In the late 1960’s, the BBC aired a television documentary by Alan Whicker which detailed the beautiful and peaceful lifestyle that the island has to offer. Fed up with their horrible climate, fifty British families decided to emigrate to Norfolk Island as a direct result of viewing the program. The islands population has remained reasonably steady since.

WHAT, NO TAX?

One of the great benefits of living on the island is that you are not required to pay Australian federal taxes. Because there is no income tax, the island has become known to many as Australia’s own tax haven. Although it is not entirely free of tax, since the legislative assembly has to raise money from somewhere. Items imported to the island attract an import duty, although this can be avoided as everything needed to sustain life can already be found on the island. GST is also charged at 12%.

Mainland Australians may have access to visit the island, but they do not have an automatic right to residency. Norfolk Island maintains its own immigration laws and there will normally be a wait of a few years to be granted residency. The natives are worried that if access was unrestricted, it would become a haven for hippies and poor people who would create a financial burden on the local government.

Most of the queue consists of wealthy individuals and quite a few millionaires, who are obviously attracted to the tax free statuses on offer. Even with their excessive sums of money, the millionaires have also found it hard to gain residency, since it requires sponsorship by an existing resident or business. Last month the population was estimated at 2,141, which remains fairly constant. Although many people wish to take up residency, the children raised on the island often leave for the Australian mainland after they finish school.

Back in the 1970’s, Norfolk Island was promoted as an Offshore Financial Centre. Keen to avoid Australia’s foreign exchange controls, money was sent to Norfolk Island instead. By 1971 the amount of companies registered in Norfolk Island was almost equal to the number of residents, and the volume of financial transactions in the previous five years grew by over 30,000%. The Australian government was unhappy with this situation and once again flexed its muscles and ruled that new anti-avoidance legislation must be followed in respect to taxation.

Fighting with the Australian government over control of Norfolk Island will undoubtedly continue into the future, with the native islanders keen to maintain the island as a tax-free zone. For the regular Australian who wishes to escape paying income tax, it would be wise to join the residency queue as soon as possible. What could be better than living on a tropical island and not paying tax?

LARGER COLLAPSE STILL TO COME

There are a large number of internationally renowned economists currently stating that we haven’t seen the last of the global financial crisis. More gloom and doom is predicted, with some presenting the possibility of a collapse far bigger than what was seen with the great depression.

Harry Shultz is just one of the crowd predicting further pain for the world financial sector. Just as the great depression is not expected to be a one off event, Shultz has also predicted a second coming of the ‘Bank Holiday’.

WHAT IS A BANK HOLIDAY?

The world first became familiar with the Bank Holiday amidst the banker engineered Great Depression. Shortly after being elected American president, Franklin Roosevelt declared a bank holiday on 5^th March 1933, which forced banks to close for four days. The closure time was then used to swiftly pass the Emergency Banking Act through Congress and grant Roosevelt the powers of a dictator, including having full control over the dealings of all banks.

With a thirst for power even greater than Hitler, Roosevelt moved to strip the American people of the last true measure of their remaining wealth: gold. Roosevelt and his cronies now had the power to force Americans into relinquishing their gold in exchange for paper money, which was implemented within a month after first placing gold restrictions on the banks.

Americans were not the only people ripped off or affected by this tyrant. Foreigners holding dollars were also caught up in the mess, ensuring that the Great Depression was felt around the globe. Schultz points out that a Bank Holiday now would result in a great devaluation of the American dollar and also be the cause of great losses for anyone holding the currency.

After the Bank Holiday, thousands of banks never reopened. This looms as an ominous sign if a Bank Holiday were to occur in the near future. With thousands of banks today having little or no net value, while being loaded with debt and bad mortgages, there remains the distinct possibility that many of today’s banks may face the same fate.

WHO WOULD BENEFIT?

The ultimate beneficiary of another US Bank Holiday is always the one to introduce it: in this case, the Obama administration. The first Bank Holiday ripped off the American public and the second will do the exact same thing. They will be able to ‘nationalise’ all banks, insurance companies and financial institutions and effectively create a new Nazi Amerika.

Nobody will argue against the fact that the banking system is in a complete mess. A Bank Holiday provides the perfect opportunity to clean the mess up and introduce a new range of banking legislation, which will no doubt transfer more power to the government and edge the US closer to its ultimate goal of becoming a fascist state.

Internationally, a US Bank Holiday will be a crucial step towards the planned single world currency. The IMF is poised to introduce a new currency as the international standard; replacing the US Dollar, which could effectively be wiped off the map following a serious devaluation. Eventually, national sovereignty will be erased and power will be handed to world bodies.

CAN WE TRUST THIS GUY?

Harry Schultz has been floating around in the international financial circles for a number of years. He is widely respected and has gained fame for his accurate predictions written in the ‘Harry Schultz Letter’; an international investment, financial, economic and geopolitical newsletter. His predictions have been so accurate, that it was named the Market Watch ‘Newsletter of the Year’ in both 2005 and 2008.

He is also famous for his US$4,000 per ounce predictions for the price of gold, which although they haven’t come true, can’t be ruled out just yet as being a failed prediction. Recently, Shultz accurately predicted that a ‘financial tsunami’ was on the way, as well as the bailouts of Fannie Mae and Freddie Mac. Additionally, his stock predictions make the Wall Street suits a laughing stock. This guy knows his stuff.

EVIDENCE APLENTY

Warning bells have been ringing ever since reports surfaced of devious activity in US embassies. Around the globe, US embassies are selling dollars and stockpiling local currencies from their respective countries of operation. Some embassies are being sent enormous amounts of US cash, with the rest being given enough to last for at least a year. Interestingly, the Pound Sterling has been banned from the currency purchase list, probably meaning that the currency faces extinction like the US Dollar.

The recent changes to US law and the push for ‘nationalisation’ are widely considered to be softeners to the more powerful laws the government plans. An overheard conversation between Federal Emergency Management Agency (FEMA) officials and a Californian Police Chief adds further fuel to this argument. They agreed that the plans for federalising the police force would need to be completed if the Bank Holiday is introduced, since they acknowledge the situation will turn ugly.

The Obama administration has also proposed a plan to give even more power to the privately owned and unregulated company: The Federal Reserve. ‘When’ the proposed laws are passed, the Fed will have the authority to ‘regulate’ any company it deems to be threatening the economy or markets. Can anyone say Draconian?

For some reason Obama believes that it is wise to hand over control of his nation to a private banking cartel. So not only was the Federal Reserve’s activity the greatest influencing factor behind the global financial crisis, but they are handsomely rewarded for it.

END RESULT

According to Schultz, the most likely time for a Bank Holiday is late August or early September, although no predictions have been made as to its duration. It is important to remember that the American public are now a pack of unmoral, rowdy and violent wolves, who will not take a Bank Holiday lying down like the honest and peaceful Great Depression Americans did. If the Bank Holiday is introduced, we can expect riots and the introduction of Martial Law.

This situation wont bother the US government, as they have already been preparing for its introduction, with the completion of a vast number of ‘concentration camps’ for anyone not following like a sheep. Over here in Australia, we shouldn’t expect a Bank Holiday, especially before the results of the US version are in. But we should take notice that whatever happens, the US Dollar is on a downward trend and the world is moving towards a single currency and a single government. Goodbye Australia.