Exchanging facts

February 12, 2005

Dear Sir,

Please allow me to address a lack of truth and a lack of economics as contained in a recent letter from ?Born Bermudian?. In this letter Born Bermudian states that Caribbean countries hold their citizens hostage by preventing them from freely using their money as the see fit. From this statement I believe that Born Bermudian needs an education in economics.

I will address his letter from the perspective of the Bahamas because I know the Bahamas very well. It is true that the Bahamas has in place an exchange control regime to manage the flows of currency into and out of the country. Contrary to what Born Bermudian states, no one in the Bahamas is ?held hostage? because the controls are only applicable to the capital account, there are no controls on the current account.

Born Bermudian may conveniently forget that until, I believe 1990 or so Bermuda too had an exchange control regime in place and I believe this regime was removed in conjunction with the Bermuda Stock Exchange becoming an international exchange. From memory, the local M1 money supply ? notes and coins in circulation ? in Bermuda floats between about $32 million and $38 million dollars and the foreign currency reserves are about $75 million, twice that of M1.

In the Bahamas M1 is about $1.3 billion with a foreign currency reserve of approximately $450 million. It is more difficult to completely relax an exchange control regime when local M1 is greater than the foreign currency reserves because your reserves could be wiped out immediately and then how would the country settle it international trade bills? If I am not mistaken, although exchange controls have been removed, when purchasing foreign currency there is still a submission to the Bermuda Monetary Authority, which still manages the flow of money into and out of the country.

Just for the record, I live in the Bahamas and I can travel at will and I can go for as long as I wish. Bahamians on the whole travel as much as, if not more than Bermudians and we know how Bermudians like to travel. There are hundreds of Bahamian students in Ivy League schools in the US. In fact, there are thousands of Bahamian students studying around the world. There are some 400 physicians in the Bahamas and probably the same number, if not more attorneys (all Bahamian). According to your argument they must have taught themselves because you claim they were ?held hostage? within their country. There are Bahamians that have second homes in other countries.

As far as accessing medical care, I would suggest you pay a visit to the offices of the Colonial Insurance Group and talk to them about the medical insurance market in the Bahamas. The Group has a Group Medical insurance company here in the Bahamas, probably settles medical claims in the US for Bahamian insureds to the tune of $33 million dollars each year. There is probably $100 million paid each year in medical insurance premiums and all the insurance companies have large medical network arrangements in place and none of the insurers force their clients to remain in the Bahamas for medical treatment.

Exchange controls are put in place only as a vehicle to manage the economy of a country, not, as you say to hold people hostage. I do not know where you get your information from but I would suggest that next time you decide to make a public comment educate yourself on the topic and make sure you have factual information, otherwise you will do what you have done here; make yourself look extremely ignorant.

As the saying goes, ?It is better to be thought a fool then to open your mouth and remove the doubt?. Well, I guess that?s why you hid behind a pen name because doing so allows you to say anything you wish without being held accountable for your what you say.

Camilla for the Regiment?

February 13, 2005

Dear Sir,

The Bermuda Regiment has been without a Colonel-in-Chief since the demise of Princess Margaret. This might be the ideal time for the Governor to invite the soon-to-be HRH Duchess of Cornwall (Camilla Parker-Bowles) to become Colonel.

Government is mistaken

February 13, 2005

Dear Sir,

Our government has decided, without consulting the public, to forbid Bermudians from selling real estate to non-Bermudians. This will cause major financial loss to Bermudians who have put their hard-earned capital into real estate that can gain higher prices when sold to non-Bermudians. If our government wants to prevent non-Bermudians from using ?fronts? to purchase property that should not be sold to them, then focus on that. Do not penalise Bermudians who have carefully invested precious capital in the non-Bermudian market.

To do so is to betray prudent investors who had no idea such a disaster would happen. If our government thinks that prohibiting sale of real estate from Bermudians to non-Bermudians will eventually lower real estate prices in general, and thus benefit the majority of Bermudians, they are mistaken. The main result of softening the real estate market will be to erode the primary investments of thousands of middle class Bermudians. Our government has a responsibility to strengthen our economy, not to damage the investments of hard-working people.

Irresponsible policy

February 13, 2005

Dear Sir,

Government?s abrupt, Draconian interference in the real estate market is as ill thought out as it is economically unsound. It seems depressingly likely that the totally irresponsible mismanagement of the people?s taxes has left them with a severe shortfall and they are lashing out to refill the pot emptied by Berkeley, the BHC and other nefarious abuses. All that will happen in the near term is that Bermudians will take their properties off the market.

What about the loans?

February 14, 2005

Dear Sir,

Has anyone considered the loan/collateral aspect of this latest blunder by the PLP? Thousands of Bermudians have borrowed money to build. Now in the new restricted market, their homes have inevitably lost considerable value. The problem is that the original appraisal value of the house and property will no longer support the collateral required to support the loan.

Will the bank tell the borrower to get a new appraisal to assess the new lesser value and then require more collateral to make up the shortfall? Or will the bank agree to a longer period to pay off the loan? Or, will the bank be stuck with the lesser collateral value of its loans? In this event, because the bank will lose out when a property has to be foreclosed, will loans become harder to get, and for lesser amounts? Will this not mean smaller houses for the same assets, assets now appraised at a lesser value?

Portent of things to come?

February 10, 2005

Dear Sir,

On January 16, 2005, at approximately 2.15 a.m. my mother?s friend was walking pass Victor Scott School on Pond Hill heading home. When a group of teens between the ages of 15-17 years of age, called out and said ?hey!?, when he turned around he felt a hard blow to his forehead causing a very serious injury. Suppose the rock would have hit him in the eye, or his ear. Suppose it could have killed him, and they had the nerve to run.

Yes, let all have a say

February 11, 2005

Dear Sir,

I see with great interest that the Reverend Vernon Lambe is urging all Bermudians to have a say in the Independence issue. There is one very easy solution to that. Have a referendum and that way all Bermudians will have had their say.

It?s what we deserve

February 9, 2005

Dear Sir,

Mr. Dunleavy?s letter on the Dept of Education brings two things to mind. Whatever disagreement one might have with his two pronged approach (accountability and competition) you can not fault his history. The system does not work as it should. The two things I would say are these: 1. Education is not a vote-getter.

This is why it has been ignored. 2. The only way to change education is to change people?s attitude towards it. Whatever form education takes, reform is a pointless effort if the public does not see it as a cause worth spending their money and votes on. A democratic government can not maintain an unpopular expensive programme.

There are two ways of changing this. First, a political movement that creates support for education from within the people. This has happened but without sufficient effect to matter. Second, the people elect a government capable of guiding the people to an opinion of education that will do them good; in other words leadership. We haven?t had that in a very long time.

It is probably a very good time to stop talking about the wrongs and missed opportunities of either governing party over the years. This is so huge a problem that it comes back to the Government?s employers. Blaming the public is risky politics and can be dangerous. But why has it gone so terribly wrong for so long? IMHO, you get the education system you deserve.