Some Thought for Food

| 29/09/2010

Here is some food for thought and at the same time some thought for food. Lately we all seem to be ranting about politicians, corruption, crime, unemployment, just to mention a few of the seemingly urgent problems facing us in Cayman. However, none of these issues can be properly addressed without first considering our most pressing problem as outlined here.

It is the penultimate problem we are facing which will eventually render all other problems as insignificant.

Cayman’s current population (not counting tourists and visitors) is about 50,000 men women and children who represent the complete spectrum of class structure from the very wealthy to the poorest of the poor.

We all have one thing in common in that each of us wants and needs to eat 3 meals a day. It is estimated that the AVERAGE cost per person per day for food is CI$20.00. The math shows that 50,000 times $20 = 1 million dollars per day for all of us to eat each and every day. That translates to $365 million per year. It is probably more since this does not take into account the restaurants and hotel food service facilities catering to tourists.

So each day we all eat about 1 million dollars worth of food. Since very little is produced or grown here, most of the money will be sent to the USA to buy more food for tomorrow and the next day, etc. The money keeps flowing out and the food flows in. But wait! If the money keeps flowing out without being returned, won’t we eventually run out of money? The answer is YES. In fact, we have already run out. We are on our second loan from the UK and have a half billion dollar debt load. Why? Because the money is flowing out faster than it is flowing in.

The money can only return here if it is brought by tourists, investors or the financial industry. Of course, there is one other way, which is in the form of the Cayman Government seeking loans from Great Britain to help keep us afloat. So in essence we already have run out of money. When we are finished spending the latest money loaned to us by the UK, what then? There are not enough tourists to make a dent in our debt situation.

The financial industry is leaving for greener pastures where other governments offer little or no fees and taxes. In trying to remedy this massive debt problem the government has decided to try the "quick-fix" solution of raising duties and fees in order to get the badly needed capital to pay off past due loans and to make the civil service payroll. All government fees and taxes are the reason for the increase in the cost of living; such fees also act as a dam or blockage which prevents money from flowing to Cayman.

The real solution to our financial crisis is to lower or eliminate government fees and duties for a time in order to allow the economy to make a recovery. Lower prices mean more tourists and investors. It appears that the current government, for whatever reason, does not see the big picture and is destined to make the same mistakes that have been repeated many times throughout history.

Two things are noteworthy about all of this. First of all, you will notice that it does not take someone with a degree in economics to exercise some common sense and use some simple math to see that we are headed for certain disaster. Secondly, the above million dollar a day scenario is only for food. It does not take into account our other daily needs such as gasoline, electricity, water, clothing, mortgages, cars, furnishings, dishes, toothpaste, shampoo, soap etc (you get the idea).

All in all, we import about a billion dollars worth of stuff each year. The money flows out but it’s not coming back. We need to lower government duties and fees NOW (yesterday would be even better) because no matter what causes or organisations people are a part of, their causes will be dwarfed by the need to find something to eat.

Defenders of the government’s policies will show you that our cost of living is on a par with other similar places to Cayman. But Cayman does not grow sugar cane, or coffee or have anything to export. We are unique in this way and cannot be compared to other places. Such explanations are obviously hollow or we wouldn’t be in this negative spiral that we find ourselves. It is also silly for the UK or the government to consider a system of direct taxation since if the money going out is greater than money coming in, there will be an ever decreasing amount of money you can tax.

Equally silly is that the "quick-fix" of raising duties on fuel and electricity in order to get some quick cash to rescue the economy for the near term is the government taxing itself. Government is the biggest user of fuel and electricity in Cayman so by increasing the cost of these items means the cost of running government went up as well which causes the need for even more money than before. The tragic part of this logic is that now, by making everything even more expensive than before when it was already too expensive in the first place, we have further deterred visitors from coming here and bringing back the money we need to survive.

My only hope is that you read and understand this, email it and share it with as many people as you can. Shout it from the mountaintops!

 

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  1. Anonymous says:

    I agree in part with what your article is saying. Here is the thing – this Island produces very little of anything. Everything has got to be imported, hence money will and always has left the country. This cannot be avoided. The profits stay or at the least are put back into the economy. Your example of food; I doubt the supermarkets are selling the food for what they are paying for it, hence the gross after purchase, are being spent in some form here – duties,payroll, fees etc.

    The problem is that there is very little new money coming into the local economy at this point  like it use to be. But no matter what you are selling here, there is a great chance that it will be imported from abroad and hence money leaving. This is a circle that has been and always will be going on.  I think a point that has been missed is that the money has always left, we just need more of it to circulate within the country before it departs so the local coffers can grow. At some point the money leaves and comes back in a product.

    • Bean Counter says:

      Dear Anonymous,

       
      Re-read my letter. You do in fact agree with it entirely. The whole point which we both agree on is that eventually new money must come back here either with tourists or by investors or financial industry transactions. I am not disputing that the supermarkets make a profit. But unless new money returns we will eventually eat our way to poverty. You argue that goods coming in represent money coming in when it really represents money that had to leave in order to purchase it. Yes, imported goods will be sold at a profit and that money had to come from somewhere too. When tourism slows down or dies due to the high costs here you won’t eat less or use less electricity or gasoline. It is this imbalance that is important and is the main point of the article. WE MUST SEND MONEY AWAY FOR FOOD. Unlessthere is more money coming back than going out then we are running on negative cash flow which will eventually run out. Money does not grow on trees here either. One person argued that the financial industry contributes more than enough to offset the outflow of cash. The problem with that is the people in the financial sector will spend some of it here to meet their needs but the majority of it will be sent off island or otherwise invested to make them more money. Little of it will trickle down to do the economy any good. I would like that reader to explain how money made here by the law firms, accounting firms and other financial services supports the hoteliers, and their employees or the taxi drivers and the people involved in tourism. Most foreigners working in Cayman are here to earn money to send back home to family much like the days of old here when the men went to sea to make wages to send back here to provide for their families. Why do you think companies like Quick Cash are thriving here. They specialise in sending money away from Cayman never to return. As for wealth, wealth does not trickle down. Wealth trickles up. Just ask the cell phone companies or nail salons who their biggest users are. When the working class gets money they spend it. Most live from paycheck to paycheck. When the rich get money they invest it or save it; and not always in the country where they live. It is the spending by the masses that makes the wealthy rich. Stopping the negative cash flow is the key here to our future. I will finish with an interesting email I received this year which makes a good point:
                 
            Its a slow day in a little East Texas town.. The sun is beating
      down, and the streets are deserted. Times are tough, everybody is in
      debt, and everybody lives on credit.. On this particular day a rich tourist
      from back east is driving through town..       
          
          He stops at the motel and lays a $100 bill on the desk saying he
      wants to inspect the rooms upstairs in order to pick one to spend the
      night.
          
          As soon as the man walks upstairs, the owner grabs the bill and
      runs next door to pay his debt to the butcher.
         
          The butcher takes the $100 and runs down the street to retire
      his debt to the pig farmer.
         
          The pig farmer takes the $100 and heads off to pay his bill at
      the supplier of feed and fuel.
         
          The guy at the Farmer’s Co-op takes the $100 and runs to pay his
      debt to the local prostitute, who has also been facing hard times and
      has had to offer her "services" on credit.
         
          The hooker rushes to the hotel and pays off her room bill with
      the hotel owner.
         
          The hotel proprietor then places the $100 back on the counter so
      the rich traveler will not suspect anything.
         
          At that moment the traveler comes down the stairs, picks up the
      $100 bill, states that the rooms are not satisfactory, pockets the money, and
      leaves town.
         
          No one produced anything. No one earned anything.
         
          However, the whole town is now out of debt and now looks to the
      future with a lot more optimism.
       
      Now the townspeople must wait for more money to arrive in order support them.
       
      I would also like to call your attention to an editorial in the Compass by Truman Bodden regarding the pitfalls of our present constitution. What he says is alrming and true and if rectified could make a huge difference in Cayman’s economic future.
       
      Thanks for caring enough to respond.
       
       
       
  2. Karyll Iton says:

     I want to say that I agree with 99% of what this article says. My only disagreement is with your stance against direct taxation. Most of what you point out (duty, government fees, etc) are examples of indirect taxation and I agree whole heartedly that those are the enemy of progress for our island but I think direct taxation is a different animal. I guess I will reserve my comments on direct taxation for now.

    That said, one thing that pops up as a solution from an individual stand point is a concept called import substitution. If we all implement this on some level the benefits to the local economy would be substantial. Take beer for example. If we buy an imported beer, then the money spent on that is in large part gone. Sure there is some trickle down revenue (the store or bar, the distributors, the shippers), but that is not the majority of the expense. If say for example just 10% of our population switched to our local beer (which is actually pretty good…not trying to give them a plug but it is), the economic benefits would be exponential. Job creation, retained cash in the economy etc. Beer is a substantial import so we are talking about tens of millions of dollars here.

    The thing is, I have tried to convince many of my fellow of the above logic but it seems to escape the grasp of most….

     

    • One for you. Two for me. says:

      I like the concept of Import Substitution and where applicable it would go a long way to improving matters.

      The other point, about direct taxation, is a prickly subject.  There are certain benefits one of which is that the government has a better idea of it’s income.  In most jurisdictions direct taxation (let’s call it by it’s more notorious name Income Tax) is deducted at the source.  This applies to workers only. Corporations and businesses are allowed what is called a Fiscal Year to reduce or eliminate tax on income, and many, many, accountants and consultants are busy working on this at all times.  The public doesn’t have that advantage and relies on thebenevolence of government to return a portion of their income.

      In any event, under direct taxation the government can be assured a steady flow of income. Which, for the most part, is used to support social programs.  The rest is used for suchthings as defence and maintaining infrastructure. The only real stumbling block to direct taxation is convincing the public there is no waste, on other items such as civil service salaries, benefits, botched government investments, MP’s salaries, MLA’s salaries, Department Head’s salaries, Administrator’s salaries, secretaries, offices, lunches, haircuts, traveling, perks, and other "misc." expenditures.  Many people are not convinced of this.  And this holds true in all jurisdictions with direct taxation that there is ample evidence of over-spending.  Or downright graft. 

      Cayman has an even larger problem.  That being not even the government knows how much money it has spent, or where, let alone the public. Historically, governments lose track of public money after they have acquired it.  That being at the source through preemptive deductions from public sector wages.  In Cayman’s example it would therefore be next to impossible to implement such a system after the fact.

      Without a possibility of a public revolt.

  3. Anonymous says:

    Cayman’s balance of payments situation is a problem but it is not a crisis.

    Crime is THE immediate threat to all of the residents of Cayman and it is now affecting our tourism sector adversely which in turn affects the balance of payments problem you point out.

    What concerns me most, (and I know that I am not alone in this regard), is the fact that the government refuses to do anything meaningful to tackle the criminal element which is destroying Cayman. Government officials going on safari in Africa while others lounge about in the newest 5 star hotel in Singapore will do nothing for Cayman other than increase our debt.

    The tourist dollars are never going to come back if violent crime keeps going the way it has been for the last year, and financial services providers will look elsewhere if Cayman is no longer a safe place for their employees to live.

    Our " leaders" need to get their butts back to Cayman and pass the legislation that is needed to get the criminals off the streets and to keep them off the streets for a very very long time. Either that or we need to do whatever it takes to replace the current "leaders" with people who can solve the problems facing the country.

    • Bean Counter says:

      Dear Anonymous,

      High crime rates are a direct result of a faultering economy. As economies worsen, so does crime. And the double whammy is that we have less money to use to fight the ever growing problem (inversely proportional). Even the best of of will turn turn to crime as a last resort in order to meed out basic needs and the welfare of our loved ones. Fixing the economic problems will eventually solve the crime problem by creating jobs for the unemployed and producing the much needed capital for having an efficient crime fighting force. As more and more of us lose our jobs, more criminals will be created. To stop this cycle we must deal with ways to fix the economy first and foremost. I highly recommend you check out the excellent editorial appearing in the Compass by Truman Bodden regarding our constitution. It is a real eye opener and may be the root cause of the poor governance taking place here.

      Help keep this topic of conversation alive. It is the only way to educate ourselves on defining our problems so that proper solutions can be applied.

       

      • Anonymous says:

        Dear Bean Counter,

        Thank you for your reply to my comment. I do not disagree with you that inward investment is important. I encourage you to continue to point to the need to bring in investment. I do disagree with your suggestion that the current incidents of violent crime are directly related to the economic decline. Most of the people who seem to be involved are people who have always chosen crime over employment even in times of plenty. My point is that high crime rates, and in particular violent crime rates, raise the return investors expect and decrease the probability of investment.

        The solution I offered requires no upfront cost to the country, would save the country money and would lessen the probability of crime. Having our "leaders" stop their luxury world travel and related waste of public money saves the country money. Having our "leaders" pass legislation designed to keep violent criminals off our streets through; increasing the penalties for violent crime, eliminating parole for violent criminals, ensuring that the penalties for violent crime are served consecutively and not concurrently, and reforming Northward,  will cost the country nothing but will make this country safer for all residents and a safer place to invest, thereby increasing the likelihood of investment. Passing legislation to increase the safety of the islands is the "low hanging fruit" in relation to what we have to do. For the life of me I cannot understand why the government refuses to do anything that might upset the relatively small number of violent criminals in our community. 

  4. Anonymous says:

    The government can also print money in addition to selling bonds or taking on other debt, but the point you are making is too simplisitic. At face value it would lead to the conclusion that Cayman cannot pay for food right now, when it obviously can. The economy is based on tourism and offshore finance. Both are having problems but this is not just a Cayman problem. You’re going to have to wait for a recovery in the US an the UK to see how this shakes out. If you assume that the economy never recovers then you are correct and everyone will have to move to where the food is. In the meantime it is not true that reduced spending will solve the food question.

  5. Anonymous says:

    You raise some very interesting points. I would point out that we do not borrow from the UK.  We borrow with the UK’s permission on the open market.

    • Adam Smith says:

      But without the "brand" of the UK standing behind Cayman the cost of borrowing would be far higher.

  6. Bean Counter says:

    Some of you are missing the point entirely. It isn’t about how much you spend on food that is important, it is the fact that whatever money you spend to eat leaves the Island to bring more food in. The money does not come back unless some tourist or investor brings it. Our money is leaving at a much greater rate than it is returning. Eventually there will be none left to spend. Additionally, you spend much more each day for things other than food which also sends your money off the Island.

    If you use electricity or gas or drive a car or wear clothes, your money is leaving the island everydayto pay for these things. If it is true that we do not currently have any outstanding loans from the UK then we are indeed officially bankrupt and we are using up what small reserves of money remains in our bank accounts and matresses. This is not political. It is a problem that has faced people for centuries. Our politicians and their policies become the scapegoats. Yes there is corruption and bad policy but in the end they too will be searching for their next meal like the rest of us. Nature has a way of leveling the playing field in the long run.

     

    • Anonymous says:

      You act like this is something new… How many countries are running trade deficits? Um, the vast majority of the westernized world, particularly countries that have developed a services-based economy or secondary/tertiary commodites based one. The question is rather if the value of the food and other raw or finished goods brought to the island exceeds the value of services and/or finished goods exported (mind you the latter is extremely difficult to fully quantify, particularly becauseit often deals with the relative skill-level of the working population and their relative productivity in producing services). Then the question becomes how much is the deficit and how does that quantity relate to the predictable future of existing services as well as the probability of the creation of new services, and the values each will command.

      While I agree that government’s costs can be diminished, I highly doubt it will bring about a trade value surplus for Cayman. This is particularly true if you expect the living standard to remain as it is, or the population to remain relatively stable. I also agree that raising fees was a very poor decision to try and balance budgets as it was quite short-sighted and will certainly depress growth in those business sectors. Those points you made were valid. But the idea that we’re just sending money away is quite naive and simplistic. I really can’t agree with that and I have a very hard time sitting by while idiocy is used to justify valid arguments (it diminishes the actual value of the argument, you see).

      • Bean Counter says:

        Dear Anonymous,

        The only thing simplistic and idioitic going on here is the recent increases in duty and other fees.

        Decreasing duty by 2% to 18% on most imported goods would have been a much better decision. It would have eased some of the strain on the economy to perhaps allow for a bit more capital injection. Everyone knows money flows from our shores in order to bring in our necessities. Even a simple idiot such as myself knows this. The problem is that there is not enough money flowing back in through the proper channels such as long term tourism. Last week there were over 6,000 empty condominium rental units. The owners of these properties who invested substantially still have Strata Fees due each quarter. How long can they maintain this drain on their wallets? Business are closing at a rate never before seen here. Crime is out of control and unemployment is likewise growing. Ask a taxi driver or a hotel operator how business is. Sometimes problems can just as simple as "THINGS ARE TOO EXPENSIVE HERE!" I did not propose government cost cutting in my article as a solution to our economic problem. It is of course going to have to be part of the solution. Rather, I suggest that the flow of money to Cayman is being blocked by the high cost of everything here due to government fees. Less duty and fees results in more money coming in which is indeed simplistic and indeed what we need now.

         

    • Joe Mamas says:

      Bean Counter,  You have done a great job of trying to simplify a complex problem so more or Caymans population can see it for what it is.  I hope this helps them to help themselves to fix it someday.  Some of them will never get it and some of them are the problem.  No matter what you and anyone else tries its up to them to fix it.  For now at least it is more apparent that Caymans capacity for making problems far outweighs their ability  for fixing them.  But someday.

  7. Joe Average says:

    Let’s understand one thing:  We constantly write and talk about the inability of government to do this, or that, and even more so about a lack of any real solutions to the economic situation, be it employment, the cost of living, fees, etc.  Why?  Why do we continue to discuss this?  As if something were going to change.  Let’s use a little logic:  You’re a politican.  Does it matter?  You belong to a political party (one of two).  An election is called. Maybe you and your party get elected to form the next government, or you don’t.  Either way, you have a job for four years.  There’s your unemployment problem solved.  If you are part of the elected government, you blame the other party and make damn good money doing it.  Plus benefits.  What cost of living?  And, a nice economic situation to be in, especially if you can collect a wage and a pension and run a business.  

    If you lost the election, and are in the Opposition, your job is easier. You wake up every so often and then, blame the other party (but, you are actually relieved you don’t have to deal with the mess you left or they’re making). 

    When you do this you make less money. Plus benefits. 

    Same situation.  Steady employment, good wages, benefits,etc.

    Either way, what we have to realize and I’m surprised we haven’t  is:  When money is lost or wasted, it isn’t their money, if people are unemployed, it won’t be any of them.  And if there is an economic crisis they don’t feel it.

    So the public would be very grateful if you (politicans) would stop blowing smoke at us.

    • Anonymous says:

      Amen. I am certain that if the politicians had to repay money stolen by robbers out of their own pockets then the crime situation would be resolved in hours. As it is, what do they care.

  8. ExPat says:

    3 meals a day?  I am lucky to get 2 and I only spend $10 on those.  I already got rid of my car, cable service and my home to move into shared accommodation and right now I am having to manage on 2 meals a day because added to rental and utilities, my wages are already spent before I earned them and I don’t got one luxury – oh yes I lie – I have one window A/C unit – but other than that I can’t cut back any further and I’ve already been told by my employers that there’s no raise for me yet again this year.

    Damn right government’s got to give coz the people don’t got much if anything left to give anymore – its already long gone.

  9. Anonymous says:

    nice logic – but your facts are not quite correct.  Cayman does not have any loan from the UK – never mind a second one..

  10. Anonymous says:

    I agree with your thesis as a whole.  However, the $20 per person/per day I can’t seem to make sense of.  In your estimation  then a family of four for 30 days would spend $2,400 on food alone.

    Now, I admit to being on the thriftier side, but my family of four spends on avearge $900 a month on food, and we eat quite well (full meals, snacks for the kids, even some occasional alcohol!).   So that part of your arguement I have to disagree with and ask you to recount the beans! 🙂

  11. Expat - Legal says:

    Hi Bean:

    You are of course right on all counts.  I had posted quite a while ago on the balance of payments imbalance (under a different name), and the dire consequences of allowing the cash burn rate (outgoing) to exceed the incoming revenue side of the equation for more than a short while.  No one cared then and I doubt that anyone will care now. 

    I made a small investment in Cayman and I am now stuck with it and while I have not written it off the books literally I have written it off regarding any potential for survival, other than such of the physical assets that might survive for the decade or more which I project it will take for Cayman to complete its self-imposed incineration-level meltdown and to have a hope for a re-birth as something else. 

    The problem is that I don’t see what could be the foundation for the re-birth.  The beaches are nice but no nicer than the competing islands’ beaches, and the other guys offer serious competition for the tourist dollar by being able to sell it for less (I expect you will agree, if for no other reason than that they can grow locally the food needed for the tourists and to feed the tourist workers, and they therefore have a financial advantage over Cayman right out of the gate).

    Once financial services has migrated out, there is no reason for them to migrate back.  The costs of migration are hefty, and once financial services are gone there is little likelihood that it can be lured back, given the competition’s vastly friendlier economic environment.  Cayman just can’t undercut the other jurisdictions with its economic disadvantage.

    For me, I see the goose who lays the golden eggs as being mortally wounded, and I don’t see another goose showing up to replace this one.  Do you agree?

    • Bean Counter says:

      Hi Expat-Legal,

      Glad to hear at least one person see’s the light. I believe we can avoid the devastating forrest fire scenario if action is taken soon to reduce the cost of living and visiting here. Our elected officials and policy makers need to learn that old adage " Give a man a fish, feed him for a day, teach him how to fish and you feed him for a lifetime." Our rapid growth to prosperity came by taking fish offered us rather than learning how to fish. Now it is time to learn. The bait is lower prices and a free and open economy without the overblown civil service, government programs and excessive spending. Those in charge will be forced by the  laws of supply and demand to comply with this mandate or watch as this fire burns itself out. I only hope there are enough fish in these waters to feed all of us and enough rainfall to quench our thirst.

      Bean

       

      • Anonymous says:

        I agree wholeheartedly with your article.  Maybe the monthly food cost was off, but really not much!!!  Look at gas prices?  I know that is another subject, but we are paying almost US$6.00 per galleon, where as in the states gas is between US$2.20-US$2.59.  Why are we paying over double the cost?  No one can ever answer that question.  If everyone on the Island just for one day don’t buy gas, I know you won’t get to work, school, etc., but maybe they will see the chain reaction of it.  We complain and complain and complain, but Cayman on the whole forgets very easily on what is happening – Past, Present and they don’t even want to think of the Future!!! 

        If you look at government as a whole, we now have a Premier (high salary), we have a two party system (more salaries) who are serving no purpose whatsoever, the list is endless!!!!

        • Anonymous says:

          If they lowered the airfare to the island, I belive that would help the economy in so many different ways. The hotels would fill up and so would the restaurants. The stores would get business along with the watersports. Spas would receive extra business and so would rental car agencies. It is the trickle down effect that all starts with airfare. This is the time to do it.

          • Anonymous says:

             I think the hotels, guest houses etc need to lower their prices as well. Eg, guest houses/villas…  In other Caribbean countries, you get a butler, cook, driver, etc for the ridiculous prices that they charge here.

             

             

      • Culture Saver says:

        Bean Counter I agree with your position completely. The facts are right in front of us and we don’t have to look farther than Jamaica to see what happens when your country gets in a net negative cash transfer situation which is what you describe.

        I think that the medical tourism is the probably the best put forward remedy as it is stable, environmentally clean (if done properly) can provide long-term employment with the ability to take that knowledge to other places (such as nursing). I think that we should build on this concept and try and develop the island as an education base. Build a 4 year university in conjunction with the medical university slated for the Shetty project and lure college students. If you have ever lived in a town or city where the university is the main base of the economy, they tend to be very friendly, low crime, and very progressive places to live. College students spend continuous money no matter what the economy is doing as education is pushed during recessionary times. If you can make certain disciplines highly specialized, you can bring in top educators that then lure more and more students. I think you could take advantage of our natural resources and make specific advantages in Oceanography, Marine biology, ECT.

        The other future revenue stream is tourism. You are correct that our tourism product is not substantially better than other beach areas because the cost trumps the experience. I thinkthat the government should invest with developers (locally hopefully) to develop hotels that are more affordable. If you can lure a lower earning family bracket of tourists your numbers are likely to rise. Having an ultra-high class tourism market does not pump continuous money into the economy due the frequencies of visits by people owning exclusive condos. It does not need to be turned into a Spring Break location by any means, but a more middle class family destination that would rival the cruise ship passengers. Government partnerships establish continuous government revenue.

    • Joe Mamas says:

      The writing has been on the wall for all to see for a while now but few have taken the time to read it.  Cayman will not be the first or the last to borrow themselves into a total meltdown.  I also have invested in Cayman and have seen the dream going downhill as any money I have contributed to Cayman goes for first class tickets, turtle farm food, and many other things besides the education of Cayman that I would have hoped for.(teaching them to fish) I also have about the same timeline of 10 years before Cayman can return from the meltdown it is headed for.  I personally don’t see that anyone with any power on Cayman can stop or even slow down the inevitable crash and now all I hope is for it to get over and done with so the long and hard road to recovery can start.  Cayman is in for some very hard times that make the present the very good old days as bad as they are right now.  Good luck to all who have put their lives and the lives of their children in the hands of the few who have let them down.

      • Expat - Legal says:

        Hey Joe:

        Any guesses on what constitutes the Cayman economy after the fall? 

        I’d say that international finance is over and it won’t come back once it’s gone (and it is gone) – there’s absolutely no financial incentive to return once they are all redomiciled in Luxembourg or wherever they decide to go.

        Tourism shouldn’t grow beyond what it is now (if it even holds at that level).  There’s just nothing here to increase the draw.

        Medical tourism appears to have potential to be the basis for the economy after the fall, but that presumes that the government of the day agrees not to tax the profit out of the enterprise (like they are doing to the finance/legal sector now with the fees).

        A mega yacht facility with a world-class casino would help,. but only if someone agrees to build it (and the taxes are fair).

        Anything else to speculate on?  I’m hoping for some recovery from my investment, though clearly it’s going dormant for the decade after the fall.

        • Joe Mamas says:

          Good question my friend.  I have been studying the other countries/islands that have already gone bankrupt and because most of the bankruptcies are recent(less than ten years) they are still declining/recovering) so not much to tell us what will be left over.  Most if not all of them still have something to export (fish, agriculture,some tourism, etc).  Some have a military base or oil refinery etc. to fall back on but Cayman has nothing like that.  If all of Caymans financial institutions leave they will take with them any hope of a meaningful recovery.  Imagine the Caymans with most of the Government not working,  Even less money for police, road and infrastructure maintenance, very little tourism because of the crime that will take off even more, and all the associated infrastructure that will leave or close up.  I’m thinking a cross between Jamaica and Turks and Caicos because of theUK involvement.  Seven mile beach will be a gated area,  West bay the slums, and everything in between no mans land.  Not a good picture at all.

          After everything Caymanian has failed other countries might step in to use Cayman as a military base,  off shore oil refinery, or something like that.  Of course whoever owns the loans will have much more say then the population.  Hope I’m wrong but……  Might be better to sell at a loss now than total loss later?  P.S. I am not a financial or Government specialist so take what I give with a lot of lee way.  Good luck.

    • Chris Johnson says:

      Wed 11.08

      Good posting about the Goose. For years CIMA received millions of dollars whilst the management cried out for more monies to be retained to cover costs of expertise necessary to do a good job. John Bourbon just gave up and I guess his successors equally failed to impress Government that standards need to be maintained. In any event nothing was kept in reserve and all surplus monies just dissappeared into Government coffers.

      So when you see a lack of supervision of banks, such as First Cayman Bank and now hedge funds,particularly the infamous Grand Cayman Island Fund, which has seriously impaired the reputation of Cayman as a hedge fund centre, what do you expect.

      CIMA needs proper regulation and that does not come cheap. This is not a criticism of CIMA by any means but an awake call to government.