Down with Polish debt

America's credit rating was lowered in 2011. Poland is a candidate to have its credit rating raised in 2012.

America keeps borrowing more and more. Poland keeps borrowing less and less.

Currently, Poland borrows about a nickel per dollar while America borrows over 40 cents per dollar spent.

According to Polish Finance Minister Jan Vincent-Rostowski - Poland will trim its public deficit to 1% of gross domestic product in 2015 (a penny per dollar).

How many Congressmen does it take to screw in a light bulb the public in America?

Gas of a lesser cost

To protest rising gasoline prices, Poles have taken to the streets and highways... in there cars.

A significant number of drivers in Poland are downright indignant over rising gas prices. So in true Polish style they staged a protest across the country. Yesterday they drove at a snail's pace and snarled key routes in a show of frustration.


News station TVN24 reported the protests took place in dozens of cities as drivers slowed down to 20 miles per hour, the minimum legal limit, on certain highways to pressure the government to do something about rising gas costs.

Gasoline costs about $1.75 per liter in Poland, which is among one of the lower rates in Europe.

Recently, however, after the introduction of new taxes the price of fuel has begun to rise which has angered motorists.

If Americans slowed down, perhaps we would see action on the Keystone pipeline construction put on hold by the administration and the opening of oil sands, oil shale, more gulf drilling and the Alaska ANWR. Then we would have energy security and increased domestic production, which would increase supplies and lower prices.

We have Marcy – Poland has Marzi

If you take time to talk to old people who experienced inter-war Poland (1919-1939) or Soviet dominated Poland (1946-1989) you usually come away with a story framed in the context of their life’s sculpted worldview.
However, wisdom is not the sole providence of the old. The colloquial idiom “Out of the mouths of babes (oft times come gems)” reminds us children occasionally say remarkable or insightful things.

A brand new book just translated into English titled Marzi is based on recollections of a little girl growing up in communist controlled Poland. Memoirs pertaining to quality of life, economic turmoil and government oppression seem less tainted when it is expressed through the eyes of a child rather than the opinions held by mature adults.

Chronicling her experiences by processing the meaning of everyday life and the events that unfold are presented as a series of vignettes using cartoon panels. It’s not a kid’s comic book, but rather intended for grown up readers.

From an interview with Cafébabel (a European magazine) the author Marzena Sowa explains, “Sometimes readers find it surprising that besides strikes, usually associated with ‘Solidarity’, people also had a regular life. I mean, going to school and to work, children playing in the courtyards, holidays. My comics won’t age. Even twenty years on you will find something new, something for yourself. We were all children, and we all had some wishes that never came true; I was always dreaming about getting a Barbie doll from Pewex (communist-era stores which sold Western goods in exchange for Western currencies).”

She also dreamed about living in France, free from communist rule.

The purity of a child’s unadulterated innocence is perfectly captured in drawings and words as Marzi struggles to understand what is going on in her country and what her parents are talking about. The little girl is illustrated with huge eyes, which reflects her innocent perspective and is much more engaging than could ever be expected from a plain text book.

From birth through fifth grade Marzi is a witness to Solidarność and the revolutionary reawakening of freedom that made it successfully through a terrible period of martial law.

Aside from what was happening politically, there is a private peek into Marzi's demanding relationship with her mom, and what was expected of children in Poland during the 80s.

Kids at a young age are not equipped to understand the consequences of or make conclusions on the human condition. Prior to defeating socialism fruit, candy and sugar were so rare that when a store took delivery of such items, she and her family would wait hours in line hoping by the time they got served there was still some left for them to buy.

Marzi doesn't really understand why things are the way they are. She can tell the adults are unhappy, but no one will bother to explain what's really going on.

As a sensitive only child, she tried to make a pet of the carp her father bought and kept in the bathtub of her crowded apartment until it was time to kill it so the family could feast on it for days.

It was poles apart from the world that we as Americans experienced as children. Wishing for a color TV, working in farm fields with her grandparents and chewing on window putty because she couldn’t get gum makes you stop and think how incredibly different it really was.

The shortages, brute force of government and frightened parents crowding the hospital with their children as radioactive contamination spread to Poland from the 1986 Chernobyl nuclear disaster are just part of Marzi’s memories.

Though her childhood is filled with adversity, other recollections are happier. There was joy in tagging along with her father at demonstrations and the hope raised by a state visit from native son Pope John Paul II.

Marzi observes that adults really don’t talk about the fall of Communism even though it was Poland that first broke the grip of Soviet tyranny. It was accomplished without a single windowpane being broke. Maybe that’s because in Poland it was done with finesse, quietly and nonviolently unlike the dramatic breaking down of the Berlin Wall in neighboring Germany.

Marzi was born at a time when Poland was undergoing some big changes. She watched it rebel. She watched it dream. And she saw its dreams come true.

Given the current climate of turmoil in our country, I can’t help but wonder if 20 years from now there will be another Marzi painting a picture of how thing were in 2012 - Trying to make sense out of how adults could have screwed everything up.

A quick way to buy this book is to click on Marzi at PolishToledo.com.

Polish Political Roulette: A winner every time?

You might say that Polish voters are a fickle group. At least seemingly more so than Polish-American voters with their entrenched voting habits.

Not once have Poles given any political party a second term of power since throwing off the yoke of socialism and the misery that 60 years of tyrannical communism brought them.

Poles’ yearning for freedom and liberty is hardwired into their DNA.

Kosciuszko & Pulaski

Kosciuszko and Pulaski didn’t have a stake in whether our American revolution was successful or not. Yet, they came here serving as generals on their own volition, where freedom was being defended, to serve it, and to live or die for it.

Stubborn and strong-minded? Do you know any dyed in wool Poles who are not?

During the communist era, one might imagine Poles were as weary as Colonial Americans at the Boston Tea Party struggling against the brute force of a much too powerful government. The socialist regime in Poland was intervening in daily life and taking away incentives for rugged individual entrepeurship by bulldozing the playing field with Politburo machinery and redistributing wealth within the dictated parameters of Marxist philosophy that was detested by most Poles.

Since crushing the Iron Curtain in 1989, they voted for a different government each time parliamentary elections were held insuring by fiat that no political party got too entrenched in power.

In spite of revolving door politics, Poland shot straight up the economic ladder, from an also ran country to rank 18 in terms of GDP across the globe.

Fresh ideas and policies came with each election. Perhaps that is one of the leading factors why Poland was the only EU country to dodge the economic meltdown.  They were the only EU country to have back-to-back years of positive economic growth and never having a down year.

Most spectators say on October 9, the incumbent Civic Platform party is likely to be returned as the majority or leader of a coalition government breaking the one term tradition when voters choose expanding prosperity over policies thereby rewarding Prime Minister Donald Tusk’s party with victory.



Andrew Michta



"If you look at the moving sands of the Polish political scene since 1989, a victory for the current governing party would show a continuity that hasn't been seen since the beginning of the transformation," said Andrew Michta, head of the German Marshall Fund's Warsaw office. A Tusk win "would mean people were responding to how full their purses are rather than reacting to ideological issues."

Maciej Krzak

Impervious to global financial catastrophes, living standards in Poland continue to rapidly advance unlike the recent massive loss of individual wealth in America. "The Polish economy really is in pretty good shape -- that's not just some kind of government propaganda," said Maciej Krzak, head of macroeconomics at the Warsaw-based Center for Social and Economic Research. "Poland can aspire, with time, to become one of the EU's largest economies."

Even though Tusk’s party lacks substance and ambition, Poland’s economy grew 4.4% from 2007 to 2010 while the EU average was barely one-tenth of one percent.

The reasons why Poland kept its economy growing right through the thick of the Great Recession has been discussed in previous columns. One could reasonably argue that Tusk holds a fist full of aces dealt by the practicality and common sense embraced by Poles with their reborn liberty.

After Poles freed themselves from a society of socialist dependency, it did not matter who was in office. Nobody in power could diminish the individual’s determination to prosper under newfound freedom. They molded their hills and mountains on that once desolate playing field by the sweat of their ingenuity and enterprise.

The political pundits in Warsaw predict Civil Platform will be the first party to achieve back-to-back wins in parliamentary elections. However, I’m a bit hesitant to go along.

At least now you have Huggies

I contend that if voters in their twenties who at best were in diapers during the Communist Era, are not represented in large numbers at the polls, there’s a chance that the tradition of not re-electing the incumbent government will stand.

Tusk’s party has become increasingly “content-free”, just like the MTV generation. They realize if they stand for something they might offend somebody. So, they mumble vaguely, promise to work hard, and all the while get less and less specific about issues. Finding a position paper from them is next to impossible.

With the lack of principles and conviction, the centrist party is hoping to win by presenting themselves as a “safe pair of hands” to keep steering Poland around Europe’s economic crisis.

Now, there’s a good question for fickle American voters.

Are you in good hands?

Poland’s Gain: America’s Loss

Here’s another case of corporate outsourcing greed. The famous and battle tested Sikorsky Blackhawk helicopter’s new variant built for the military units of America’s allies are now being made in Poland.

In a time of economic uncertainty and financial crisis across our great country, you would think the manufacturing of high tech military aircraft costing as much as $10 million per copy would be best kept at home. But, there must be a rational reason why the workhorse of non-fixed wing military aircraft are rolling off the production line at the PZL plant in Mielec, Poland.

Why didn’t the largest economic stimulus package in the history of our country stem the tide of the iconic American flying machine from going overseas to be manufactured?

During the Great Depression at least there was something to be shown for the dollars spent by government to improve the lot of laid off and unemployed workers. Right here in Toledo the WPA put hundreds if not thousands of men to work. Those shovel ready projects gave us a marvelous main branch library, the high level bridge, the zoo’s amphitheater, the Glass Bowl and numerous improvements to the Metro Park System. Each project was a functional and practical addition to the Infrastructure of Toledo providing benefits even years after the recovery from breadlines, failed banking institutions, children skipping school to hustle for pennies to help their impoverished families and all the other hurt and misery inflected upon an overwhelming portion of the population. 

Today, Poland is the benefactor of a failed U.S. government stimulus and a failed economic policy. More than 2,000 highly skilled Poles have been added to the Sikorsky subsidiary of United Technologies aerospace workforce with the potential for thousands more filling jobs in the industry sector if Boeing’s plans to open up shop come to fruition.

Infrastructure expansion and rehabilitation undertakings would be a welcomed scheme for getting people back to work in America since the U6 unemployment number is hovering around 16 percent. But, why in the world would our government permit the production of military weapon systems with highly sensitive designs and components to be assembled offshore when a workforce of equally skilled aerospace engineers and technicians are stateside collecting 99 weeks of unemployment checks that are financed by deficit spending?

The U.S. Chamber of Commerce in Poland named Sikorsky its "Investor of the Year", when they acquired the PZL Mielec factory and turned it into a state-of-the-art facility. The award is given to a firm that has achieved impressive growth, visibility, and a significant breakthrough in the Polish market, demonstrating its long-term commitment and its contribution to the labor market.

According to a press release, nearly 8,000 employees at United Technologies owned Pratt & Whitney and Sikorsky divisions make UT Poland’s largest aviation industry employers. The strategic investments of money, know-how and state-of-the-art technologies add significantly to Poland's proud aviation tradition among global companies.

Production of the highly advanced helicopters in Mielec will have tremendous effects on numerous other Polish aviation entities. In the short term, economic and export benefits will accrue from parts sourcing, increased labor, technology transfer and sales to allied armed forces. In the long-term, Sikorsky is evaluating other Polish firms and institutes that will serve as completion centers, sustainment and parts-management centers, in addition to certification institutes who will matriculate 200 future hires per year.



Igor Sikorsky

 Sikorsky maintained it would increase its profit margins by moving work to Poland and they have been moving aggressively to redistribute production into Poland. Cost reduction and low-cost sourcing is meant to transform and improve profit margins in the coming years.

A government official said, “Sikorsky has stimulated the development of Poland's aviation industry so much that Boeing sent decision makers to look at potential plant locations in Gdańsk, Rzeszów (the historic home of Polish aviation), and Bielsko-Biala.” A decision might be coming in two or three months.

With lower taxes, unimpeding regulations, unencumbered labor agreements, efficient supply chains, and highly skilled workforce; Poland is using its entrepreneurial advantages to its benefit. Poland was the only EU country showing back-to-back years of GDP growth through the economic meltdown. Without stimulus, subsidies, bailouts, or healthcare waivers it’s looking more and more like the flowerbed of industrial growth that once was the hallmark of America.

While critics still make arguments about corporate greed for profit and other rewards, perhaps they are overlooking a more serious type of greed that seems to be absent in Poland since the end of the communist era – the greed of people looking for so-called entitlements handed out by various national governments in disproportionate measure rather than depending on the independent, self-reliant work ethic Poles are known for, which is becoming more apparent to global producers of goods everyday.

In the past decade, Poland has become the European center for the manufacture of luxury yachts as discussed in last month’s column. Perhaps they’ll become the center for aviation as well. At least it is apparent that Poland knows how to make globalization work for her people instead of being sublimated by it.

(SIDE BAR)

Sikorsky’s contribution to the industrial might of America



Sikorsky with Orville Wright

 Igor Sikorsky was born in Russian occupied Kiev in 1889 and comes from a lineage of Ukrainian nobility and szlachta (Polish nobility). As a youth he studied the technical exploits of Leonardo di Vinci and the imaginative writings of Jules Verne. Even before enrolling in academies and polytechnic institutes in Europe, Sikorsky was knowledgeable in the designs of the Wright Brothers flying machine and Ferdinand von Zeppelin’s rigid airship.

After migrating to the United States during the Bolshevik revolution his credentials pertaining to his designs for fighters and the first multi engine bombers attracted investment capital to start his own aviation company, which built the S-42 flying boat for Pan Am allowing the first transoceanic commercial passenger service.

He perfected the helicopter design in 1939 and started mass production of rotor aircraft in the early 1940s.

Sikorsky was a devout Orthodox Christian and authored two religious and philosophical books entitled “The Message of the Lord’s Prayer” and “The Invisible Encounter”.

His company was absorbed by what is now United Technologies Corporation in 1929 eventually becoming the world’s largest manufacturer of helicopters.


Sea King & White Hawk


Since 1957, the “Marine One” helicopter fleet of the President of the United States has been comprised of Sikorsky helicopters exclusively. Two different designs are in service today. The VH-3D “Sea King” and the newer VH-60N “White Hawk”. Both were due to be replaced by an entirely new non-Sikorsky built chopper, but due to excessive cost the project was shelved.

Yacht building rides crest of wave in Poland

Shipyard cranes idle for decade

The birthplace of the ‘New Poland’ is rusting away in Gdańsk harbor. 

 

Once upon a time the Lenin shipyard gained international fame when Solidarność was founded there 30 years ago. Both Lenin and Stocznia Północna (Northern Shipyard) were huge functioning industrial complexes employing more than 17,000 workers before becoming the birthplace for civil resistance that eventually collapsed communism across Eastern Europe and contributed to the demise of the old Soviet Empire.

When Poland joined the European Union one of the conditions of membership was that the government could no longer subsidize the yards, as was the practice for years during the communist era. Because of wealth redistribution and the necessary government financial support of inefficient industries, the old socialist regime could never afford to invest in new technologies. A newly liberated Poland not having vast amounts of free market capital couldn’t catch up to more advanced ship makers, so countries like South Korea and China gained a competitive advantage building commercial vessels.



Polish built catamaran heading to the Baltic in Gadańsk



Today, under the shadow of gargantuan rusting cranes is a bright spot on a few leased acres of the old shipyard. Sleek state-of-the-art luxury Polish built yachts are reinventing the country's all-but-defunct shipbuilding industry with a sporty capitalist edge.

It might be one of the best kept secrets in the recreational boating world, but Sunreef Yachts in Gdańsk and other upstart luxury boat manufacturers on the Baltic Coast and Mazury Lake Region are accounting for more than a third of the yachts on display at boat shows all over Europe.

Clients are comparing the new breed of Polish luxury craft to the best-known Italian brand in terms of craftsmanship and buyers are proud to own vessels made in the hallowed shipyard where the pro-democracy Solidarity trade union rose up under Lech Walesa.

Sunreef went into business ten years ago. An expatriate French father-and-son team tapped into generations of shipbuilding savvy in the Gdańsk workforce to turn out products for choosy clients from Monaco to Qatar and Hong Kong to Hawaii.

Their vessels are mainly double hulled catamarans measuring up to 200 feet in length. The quality is at the same or higher level than other yards in Europe, but prices average 15 percent lower than the non-Polish competition.

A renowned yacht magazine recently carried a feature article affirming the competitiveness of Sunreef and three other homespun Polish super yacht makers. These four firms and another 100 yacht yards christened more than 20,000 boats last year.

The Polish share of the European market is significant and most are sold under global brands like France's renowned Jeanneau-Beneteau and U.S. giant Brunswick Marine. These branded lines account for around half of Poland's production.

Andrej Janowski, the first to open a shipyard to build luxury yachts after the fall of communism, attributes the drive to make more sophisticated and speedy boats to what he calls the freedom-loving Polish spirit.

"Sailing is something that is characteristic of people with a mentality of freedom “, he insisted.

Indeed, domestic yacht building exploded when communism collapsed in 1989 and the essential marine-grade resins, fiberglass, plywood and lacquers suddenly became available on the emerging free market. The craftsmanship was always there, it was Poland’s newfound access to suppliers in capitalist western countries that laid the foundation to produce world-class motor and sail boats.

While the production of commercial steamships has virtually dried up, Poland holds first place in Europe in the production of sailing yachts 20 to 30 feet long and the entire sector including mega-sized pleasure craft is growing rapidly. Next year’s production is expected to jump 30% and will potentially make Poland the center of European yacht construction.

Those dilapidated communist era cranes rusting away in Gdańsk harbor are less of an eyesore and more of a testament to the unwavering freedom-loving Polish spirit and the ever growing strength of the Polish economy in a world floundering in a sea of red ink.




Birthplace of Solidarność



Is Poland’s luck about to run out?

Lately, I’ve been writing about Poland’s shining economy. Poles skating through the global financial meltdown with healthy growth is amazing. However, I hinted at the close of last month’s column that Poland’s lucky streak might be near the end.

Well, what could go wrong you might ask.

Poland assumed the EU presidency on July 1, 2011. The timing is unfortunate because the tires are about to fall off the economic wagon of several countries. There is plenty boiling right near the surface regarding the finances of PIIGS (Portugal, Ireland, Italy, Greece and Spain). Stress in Europe is mounting, especially now that England is distancing itself from the Euro Zone and German citizens don’t want more of their tax dollars propping up failing member States.

Publicity wise, it would look pretty bad if countries started defaulting and the economic contagion started spreading like an epidemic while Poland held the six-month term presidency. Many economists say it is not a matter of if, but when countries go bust. If the Polish term as head of the EU can get through the end of December, then it will be Denmark’s headache when they succeed Poland at the helm.

But, what would really be devastating is forced radical changes in Poland’s own economy caused by misguided and mistimed EU rules and policies.

I think we would agree that during the midst of economic turmoil and massive sovereign debt across the western world now is not the time to implement programs and regulations that will hinder recovery and growth, or in Poland’s case cripple it’s strong economic footing.

Poland is a young democracy and making great strides fostering free markets and industries that were short on productivity during the Communist era. While the EU environmental activists call for the abatement of coal in Poland - the continuation of plentiful coal powering the heavy industries making up the largest part of Poland’s industrial output is not a situation any country can turn around on a dime. There is no other energy source close to the cheapness of coal. The major cause of Spain’s 21% unemployment and debt crisis for instance stems from their reckless speed at adopting exorbitantly expensive green energy.

Last month the Polish Ministry of Economy received some bad news. Major companies said if energy costs go up, heavy industry would cut production or pick up and leave for Asia and Africa. A large exodus in sectors like chemical, metallurgy, mining and cement are considered certain and will affect thousands of good paying jobs. That would plunge Poland into an economic calamity of its own.

Coal may not be the villain it is made out to be. It wasn’t too long ago when Time and Newsweek rang the alarm about the coming ice age, devoting nearly a dozen covers to the topic in the mid-1970s. This past decade has been the opposite – hysteria about global warming presumably caused by CO2 emissions. But, lately there has been increasing interest in our sun’s affect on global temperatures being way more potent than so-called greenhouse gases. Read this article - NASA Data Blow Gaping Hole In Global Warming Alarmism

Sunspots emit solar winds that heat the earth and last month the American Astronomical Society said the solar cycle is going into a hiatus meaning a lack of warmth producing sunspots. It might take as little as two years to determine if we’re headed toward another mini ice age like the Maulder Minimum experienced from 1645-1715 coming after the Medieval warm period which produced an abundance of food. Anecdotally, it snowed in Colorado on the first day of summer this year.

So, for Poland’s sake you’d think there is pretty good reason to hold off on expensive carbon dioxide permits that would debilitate one of the healthiest economies in the western world.

On the topic of fracking shale to capture billions of cubic meters of natural gas, Poland has another horde of enemies to fend off. While the prospect of becoming an exporting energy giant and removing itself and EU partners from the evil grip of Russia’s Gazprom, the environmental organizations are turning up the heat to impose a moratorium on this type of gas extraction like they were successful in doing across France.

Although there are worries about potential contamination of ground water, gas shale deposits are located several thousand feet below most water tables. If care is taken boring through the water table to get at the gas there is less danger of tainting well water.

Overall, one would think Poland was dealt a pretty good hand with coal and now the abundance of natural gas. But, changing the rules in the middle of the game might make Poland have to ‘Go fish’. Those increasingly colder winters in Poland have taking their toll on poorer folks freezing to death over the last couple years. Hot soup ain’t gonna be a substitute for much needed cheap energy.

Gold in them thar hill

Poland was the only EU country to escape the present recession and economic crisis. Industrial output jumped by double digits, while employment and wages are up and out pacing inflation. The discovery of natural gas shale fields that equal more than 300 years of the country’s consumption have major oil companies beating a path to Poland’s door. Then there’s a luxury goods market that is growing faster than any other European country and a debt to GDP ratio that is one of the lowest in the world. The Warsaw Stock Exchange had more IPOs (initial stock offers) than any other European exchange in the past 12 months including foreign companies clamoring to be listed. These are all admirable attributes envied by other countries.



What else could Poles ask for in economic terms?


How about hitting a motherload of gold and silver that was just confirmed in dolny Śląsk!


A few million years ago, way before brothers Lech, Cech and Rus came from the east to establish the Slavic nations, the Kaczawskie Mountains located in southwestern Poland were erupting with volcanic ash and lava flows that glowed in the darkness of night. The apocalyptic looking event heaved tons of wealth to and near the surface of the earth’s crust. Today, in the land of extinct volcanoes modern testing methods indicate substantial mineral riches not previously exploited since mining started there in the 12th century are ripe for the picking.


Mining has always been an essential part of the Polish economy and is one of the most time-honored professions in Poland. Through the centuries going deep under the earth was dangerous and often deadly. Although there is no caste system, Poland’s miners traditionally have been elevated to a special social station of their own. Not only for the Feast of St. Barbara (patron Saint of miners), but also for weddings, funerals and other important political or social ceremonies, miners wear an especially smart looking black uniform adorned with red feathers and act much the same as honor guards.


Perhaps the most wondrous and largest mine in the world is in Wieliczka. Salt is a very important mineral, which seemed absent in Poland until the 13th century when Saint Kinga a Hungarian princess on her way to marry King Bolesław threw her engagement ring into a Hungarian salt mine near her home only to have it found where she indicated Polish miners dig upon her arrival. For over 700 years salt had been scooped out of the depths where Kinga’s ring miraculously appeared.


At the Wieliczka works the vast subterranean chambers are adorned with statues, chapels, grand staircases, dining halls and even chandeliers carved entirely of salt. There is even a clinic for people with lung ailments since the salt laden air is antiseptic.


Although another underground city like the Wieliczka mine is not in the making 150 miles to the west, the little village of Radzimowice in the Kaczawskie Mountains just might add a ton of wealth to the Polish economy.


Stara Gora (the Old Mountain) is the name used mainly by geologists for the location, since it was formerly the place where gold, silver, iron and copper once were mined and remolded. Many mine shafts beneath the peak of Zelezniak bear testimony to the heyday of a once blooming town. Lately, the few inhabitants left take their chances and run farm tourism businesses in a region famous for its panoramic views, wine production and rare plants including orchids and gentian.


Last month four high tech borings nearly a half-mile in depth confirmed the presence of high-grade gold, silver and copper veins, which appear to be untouched in the extensions of the historic site. New veins were also discovered and include significant amounts of gold with about one ounce of gold per ton of earth.


The area has a long history of mining covering 1,000 years and anecdotal evidence suggests and that up to 18,000 ounces of gold were recovered from nearby rivers and shallow digs over the years.


Extensive underground shafts were developed in Radzimowice until the mine closed around 1930 due to low metal prices and the onset of the Great Depression. The underground workings were well documented during earlier mining operations and indicate that most of the ore was mined from six veins. During the 1950s some refurbishment of the mine was undertaken by the Communist government but ceased when the Kupfershiefer copper deposit was discovered at a different location.


With private companies free to explore with the profit motive incentives of capitalism, what was overlooked by the previous socialist regime’s central planning seems to be panning out rather nicely in a market where gold and silver have had a huge run up in value.


The energy and precious metal resources just recently discovered under Polish soil is bound to bring increased economic wealth to the nation just as the discovery of salt did 700 years ago. However, there is a sinister plot being hatched by EU environmentalists that might cripple the heavy industry and coal mining sectors of the Polish economy. The what else Poles could ask for question might just be requesting some sanity regarding EU carbon emissions policies. Stay tuned to this column for a look into the absurdia the environmental whackos may thrust upon the only shining economy of the western world.

Glitz in Poland

Więcej diamenty, proszę

Aren’t you just doggone tired of reading how great the Polish economy is doing in this column month after month? The rest of the world seems to be mired in economic crisis and here in America the all mighty dollar continues to take a devaluation beating with quantitative easing by the Fed, stimulus programs, bailouts and no true spending reform.

Polish-Americans unjustifiably have been the brunt of Polish jokes for years. At least now in one small corner of the world where our ancestors come from - throwing off the yoke of socialism and a totalitarian regime of market control and central planning has provided a cornucopia of plenty, while other nations go wanting.

Purchasing of luxury goods in Poland is off the charts. It’s been that way for quite a while and right through the economic meltdown most western nations are experiencing. In the past five years almost all luxury item categories registered impressive double-digit sales growth. Brisk economic growth and the increasing number of high-earning households fuel the growing accumulation of high-end items.

Poles have the cash to spend and are continually seeking more sophisticated international brands. International luxury item producers rushing in to set up shop in Polish shopping malls confirm Poland’s strong taste for luxury goods. 2011 will see even more new glitzy and glamorous brands battle for the favor of Polish customers.

The Polish economy has undergone an extreme transformation since the end of Communism. Booming exports and increased investment made Poland the only economy in the EU to escape an economic recession in 2009 thanks in large part to its strong domestic consumption of consumer goods and the lack of credit crisis in banking as well as very low individual household debt.

Topping of the list of lavish item purchasing is jewelry including timepieces. This category has seen over a hundred percent increase in the past five years alone. The aggressive marketing campaigns have also dumped a tremendous amount of money into media and advertising agencies. So, radio, television stations, newspapers and billboard companies are experiencing nice fat numbers on their income statement bottom lines.

The second largest category includes fine wines, champagne and spirits. The 45% increase is helped along by the proliferation of new fashionable nightclubs, bars, and luxury boutique hotels all across the country. The secondary affect in the drinks category has been the synergy with commercial real estate and construction transactions as well as massive new hiring in the hospitality field.

The next largest market segment is designer fashions. Interestingly Polish designers still dominate the couture niche while brands such as Armani, Hugo Boss, Burberry and others are making a bigger and bigger dent in the top end clothing category. If you find it hard to believe Polish designers are fabulous, remember Oleg Cassini’s birth name was Oleg Loiewski.

While the global forecast for luxury goods is rather modest, the Polish market for luxury goods has become increasingly desirable and in greater demand. Success builds on success and encourages new players to enter the game. Italian luxury car giant Ferrari is a newcomer to Poland and Louis Vuitton is set to open its first Polish store this month. These established brands along with all the other merchants coming into the Polish market bring with them the development of new distribution channels and infrastructure further boosting a hot economy in terms of revenue and new hiring.

The growing disposable incomes of Poles will continue to boost demand for luxury goods and services. Bound to help this along is a newly introduced strategy in the Polish finance ministry. While other countries are trying to debase their currencies to address repayment of structured national debt, the Poles are contemplating actions to actually increase the value of the złoty. Although this topic is a subject for another column at a future date, suffice it to say that the Ferrari with the 300,000 złoty price tag just might come down to a number more easily reached by the upper middle class in Poland. Then there will be a huge market for new bumper stickers saying, “Inne moje samochodu jest Rolls Royce Silver Cloud.” (My other car is a Rolls Royce Silver Cloud)

Poles: No Appitite for Debt

nieprzyjemny smak

Throughout the economic crisis plaguing the world for nearly three years, Poland appears to be an island paradise surrounded by a sea of red ink flooding the world. As others found out the hard way, unwarranted risk and the bundling of financial derivatives are dangerous to all aspects regarding quality of life. The wheeling and dealing that caused the bubble to burst caused immense damage across the globe causing hardship, pain and in some countries - riots, with more to come.


Could nations have escaped the intensity of economic damage and the protests that are getting more hostile across the globe?

The unique circumstances in Poland imply the whole bloody mess was easy to avoid.

Readers of this column over the last few months will remember Poland was the only EU country to post Gross Domestic Product growth in 2009 when every other member of the 27-nation bloc declined by an average of more than 4.5 percent. Continued growth in 2010 made Poland the only back-to-back year winner of an expanding economy.

The reason Poland stands head and shoulders above its neighbors and the United States for that matter is due to three basic things: Disciplined banking principles, a sound government fiscal policy and perhaps most importantly a way more cautious approach to personal debt. Essentially, Poland’s economy profited from risk moderation on every level including how individual households conducted their financial affairs.

When the bubble burst in 2008 Poland’s household debt averaged only 16 percent of GDP. Contrast that figure with 109% for Great Britain, 70% in Germany, 80% in Japan and 95% right here in America.

While property prices continue to be at the heart of the world’s economic catastrophe, the Polish real estate market did fairly well to protect wealth instead of destroying it.



With out a doubt Polish housing stock and quality of life accelerated at break neck speed after the fall of Communism and state controlled economy. One thing that lagged behind during the transition to free markets was the mortgage industry. Consequently, most homes were purchased with cash from savings or what could be raised from relatives. Mortgages in most other EU countries constituted more than half of GDP, while in Poland it was scarcely 10 percent

The individual fiscal discipline demonstrated by Poles was matched by Polish banks, which maintained firm lending standards and rejected subprime loans. And, what a unique situation: Politicians kept their noses out of the lending arena.



Double digit increases in industrial output, along with vigorous job creation, increased exports and solid wages provided secure levels of Polish household income. That led to brisk consumption of goods and services creating a good economy. These are the factors that kept real estate values stable. Property values in Poland declined only a miniscule amount.



Happy Polish super star
Ewa Sonnet shows off  her assets



While families even in the USA were struggling with household finances, Poles actually increased their bank savings accounts by double digits. Those increased deposits kept the Polish banks strong on their own merits while bailouts were as common as perch in Lake Erie in other countries.

Foreclosures and nonperforming loans even through the worst part of the economic meltdown were significantly lower than 5 percent while other nations saw defaults of up to 30 percent or more.

If you remember back to the day of busia and dzia-dzia, you might remember they were more likely to plop down cash than to buy on credit. They were credit worthy, but they tended to avoid debt because they didn’t trust it. Given the fate of Poland during the 20th century one could never predict what tomorrow might bring except the comfort in knowing there was no debt hanging over their heads like the sword of Damocles.

Easy credit makes us fat and lazy expecting things to come easy. But, as they say: easy come, easy go. Poles comprise a lean, mean economic machine. Taking a lesson from Poland and trimming the taste for debt is a good thing for all nations to consider.

Smacznego certainly should not apply to a plate full of debt.

Poland’s Hot Economy

While most of the world is still feeling the affects of the global economic slowdown and unemployment woes, Poland’s industrial output is showing double-digit growth.

January’s output according to the Central Statistics Office was 10.3 percent, exceeding the average forecast of a 9.4 percent predicted by a survey conducted last year.

Poland, which joined the European Union just seven years ago, was the only member of the 27-nation bloc to post Gross Domestic Product growth in 2009. Additionally, last year’s GDP expansion of 3.8 percent made it the only EU country to have back-to-back years of growth.

Polish industrial sector output is rising faster than expected due to surging exports, encouraging companies to increase production and add jobs. The result was the third month of double-digit output growth.

A survey by Markit Economics shows new orders rolled into Polish manufacturing firms at the fastest pace since May 2004. Export orders posted the biggest jump on record. An advantageous business climate in Poland has other EU countries outsourcing material and component production to industrial complexes all across Poland.

In the past year, Polish companies increased employment by 3.8 percent, the fastest annual growth since the global financial meltdown began. Wages also ballooned 5 percent for the second month in a row. Bankers predict that industrial output growth, along with vigorous job creation, solid wages and rising inflation currently at 3.8% will make an interest rate increase by Poland’s Monetary Policy Council necessary this month.

Producer prices, which are an early indicator of inflationary trends, grew by 6.2 percent and were the highest in at least six years. One of Poland’s banks expects the rates to increase by 0.25 percentage points to 4.00% in March. By the end of the year interest rates may grow as high as 4.5 percent in an attempt to keep inflation at bay.

Besides factories humming along at a fast pace, exploratory wells in the natural gas shale fields are showing great promise. Until now, Poland had very little luck with domestic energy resources. New techniques developed recently can crack shale strata releasing vast amounts of trapped gas. If things go nicely, Poland could become a net exporter of natural gas in addition to supplying its own energy needs. The natural gas bonanza could also be the source of thousands of new jobs for the nation’s economy.

While the figures are not audited and made official yet, it is likely that Poland’s deficit for last year will come in at around 7.9 percent. Although nearly half the size of extremely troubled big deficit countries like Greece, Ireland, Spain, Portugal and Great Britain, the EU economic affairs commissioner Olli Rehn admonished Poland that it needs to get inline with the official EU limit of 3 percent of GDP by 2012.

There’s no need to hike taxes to bring the deficit in line according to Poland’s Financial Minister Jacek Postowski. He told reporters, “The government's policy is a quick balancing of public finances and achieving the 3% deficit target by the way of spending cuts.”

The Minister avoided going into details about planned spending cuts under consideration other than to say expenditure constraints have already been written into a Polish law that took effect last year. Commissioner Rehn, confirmed that the commission sees the goal of Poland's deficit falling to 3% of GDP by 2012 as "achievable and do-able".

If world markets avoid a deepening crisis, Poland will be sitting pretty with its manufacturing and new natural gas growth prospects. The move to decentralize healthcare from government hands and making sensible modifications to state pension plans held over from the Marxist era will further bolster Poland’s economic fortunes.

The key is to make adjustments in a carefully prudent manner. Although plans are on the table, meaningful action probably will not come until after next year’s parliamentary elections since President Komorowski is not showing strong leadership regarding much needed reforms. Maybe well-educated physicians will be more prone to actually stay in Poland. After all, what good is a healthcare system if it forces good doctors to migrate to countries where they can make a decent living? A hot economy is good. Hopefully, Poland will keep it that way.

Bank on Poland

Poland’s banks are exceeding expectations reporting strong profits for 2010 and rebuilding their balance sheets faster than many west European counterparts.

Millennium Bank this week reported a better-than-expected 2010 net profit of 326 million złotys -- 217 times higher than 2009′s 1.5m złotys.  Multinational banks operating in the Polish market are doing great while rival banks without Polish subsidiaries will be very envious.

The main reason for the strong showing:  Poles have proven to be unwilling to walk away from their obligations. Millennium reports that only 0.9 per cent of its outstanding mortgage credits are endangered.

Just a couple of years ago analysts worried such loans posed a danger to Poland’s banks, and some forecasters feared a banking crisis in central Europe could sink their west European parent banks. Instead, those groups with Polish, Czech and Slovak operations are sailing on. Those without may feel indigestion.

How many American bankers does it take to...beg for taxpayer bailouts?

.pl Be Gone

Poland's culture minister Bogdan Zdrojewski asked museums at former Nazi death camps to drop their Polish .pl Internet suffix to help counter the false impression they were Polish-run.

He suggests the more neutral, pan-European .eu.

The three memorial museums, run and largely financed by the Polish state, are Auschwitz-Birkenau (www.auschwitz.org.pl), Majdanek (www.majdanek.pl) and Stutthof (www.stutthof.pl).

Many organizations scout the global media for descriptions of such camps as "Polish" because even if used as a geographical indicator it can give the impression that Poland bore responsibility for Nazi Germany's World War II genocide.

The majority of the six million Jews who perished during the Holocaust were murdered in death camps set up and entirely controlled by Germany in occupied Poland.Poland was home to Europe's largest pre-war Jewish population, some 3.5 million people. Polish Jews represented around half the Nazis' victims.

Around three million non-Jewish Poles were also killed over the six years that followed the Nazis' 1939 invasion, many of them in death camps.

No Stroh's to ya

Na Zdrowie

Through the ages Żubrówka, a wódka made near the primeval forest where Polish buffalo still roam, has been recognized as one of the official Polish national drinks. The wild sweet grass bison love to eat is infused during distillation and a blade garnishes every bottle making it the most distinctive wódka in the world.


My grandfather told me about Żubrówka when I was still quite little. He came from a small farming village near Białystok in the Russian partition of Poland. Sweet grass, honey or other tasty additives helped make the early vodkas palatable. Seems the fine art of distillation had not come of age until the 19th century.

In 1978, it was banned in the U.S. because in our food supply the FDA prohibits the chemical coumarin that occurs naturally in bison grass. What’s a little coumarin to ya? Add a little fungus to it and you get Coumadin a life saving blood thinner used by throngs of people susceptible to stroke or heart attack. I bet it would save Medicare a ton of money having patients do shots of this wódka.

The chemical coumarin is found in some pipe tobaccos and naturally in the bison grass, lavender, licorice, strawberries, apricots, cherries, and cinnamon. So, when the FDA banned its importation, I was infuriated.

I was first introduced to Żubrówka a couple years after college when I was working in Detroit and living in a Polish neighborhood. It was not available in Ohio, which operated “State Stores” at the time. From the old timers I learned of the superstition that the grass was thought to be a potion putting “the spring, in an old man’s step” so to speak. Notwithstanding how unscientific the observations of the locals were – they noticed the bulls going to work on the cows after chewing this cud. My guess is the mating season probably occurred about the time the grass matured. But, who am I to rain on a legend?

For nearly 35 years it was something like forbidden fruit. Outlaw status put Żubrówka in a league with absinthe, a liquor long banned in the U.S. because of health concerns about the chemical thujone. But, during the Żubrówka prohibition, bottles were still handily stocked in cupboards of many hardcore Polish homes.

Chemists in Poland spent years struggling to formulize a coumarin-free Żubrówka that tastes like the original. They finally came up with a process and are keeping it as secret as Colonel Sanders’ recipe of 11 herbs and spices. Now, there is a legal version of the wódka, and next is a shot at the American market.

Early test marketing of Żubrówka proved to be a bit challenging. Low-quality knockoffs without coumarin have been available in America for many years, tarnishing Żubrówka's name. The name itself also complicated branding. While the word is less daunting to foreigners than many Polish words - American people can't remember it.

The distiller couldn't accept promoting a name they didn't own and assumed American drinkers would shorten it, the way Russia's Stolichnaya vodka became known as Stoli. So they sat down and listed every contraction of Żubrówka that sounded possible, including Żubu, Żub and Ż.



Looking for some groovy grass

 The choice was Żu, and the pun on "zoo" is intentional, company officials say. I’m scratching my head because the ż in Żubrówka sounds in Polish like the g in "espionage." The whole name is pronounced zhu-BROOF-ka.

To immerse American marketers in Żubrówka before Żu's launch in November, the American marketing team visited Bialowieza Forest, where the wild bison and their herbaceous treat live.

Only a handful of locals know where to find the grass, which sells for about $1,000 a bushel. The grass grows as individual blades that hang to the ground – not as vertical shoots that are easily spotted. They also know when to pick it and how to dry it for maximum flavor.

Taken straight, its pungent herbalness is not for the faint hearted. But, it mixes well with apple cider and cinnamon stick garnish. In Warszawa they call the cocktail Tatanka – I suppose after the term for buffalo used in the film “Dancing with Wolves.”

The duty free store in Martinique and other locales sell a 750ml bottle for five bucks. Talk about mark-ups in liquor. Like cigarettes it’s mostly taxes that keep retail prices high. When it becomes available here, it will likely sell for around $25. The wódka tastes great to me. The bitterness is the taxman meddling with my pursuit of happiness.

Poland's Gold Finger



EU Gold Standard
keeping it up!

While several EU countries languish in recovery purgatory, 2010 saw Poland chalk up a 3.8 per cent growth rate making it one of the highest in the European Union.

Coming in higher than expected was due mostly to strong domestic demand. Retail was up nearly 4 percent as consumers rushed to buy goods before this year’s scheduled VAT rise. However, the deficit for 2010 is expected to be around 8 per cent of gross domestic product and overall public debt is approaching 55 per cent of GDP.

Taking GDP growth in 2009 (1.7 per cent) and 2010 together, the Finance Ministry has stressed that Poland is still the only EU country to grow in each of the two years. But analysts are become increasingly concerned about the lack of real fiscal reforms which were promised by the Komorowski-Tusk government.

If foreign investors get skittish the zloty which has outperformed the Euro could weaken.

Poland’s economy is expected to expand by about 4 percent in 2011, thanks to strong domestic demand and an increase in investment, which are likely to be boosted by the hosting of the 2012 European football championships by Poland and Ukraine.

Poles are Social

Poland is right behind America in its use of Internet social networking services according to a  new Pew Global Attitudes study. While wildly popular in the U.S. and Poland, services like Facebook are not so popular in places like Germany and Japan who are generally viewed as high tech countries.

While America is a place where more than 80% of homes have access to the Internet, what's crazy is that, in countries such as Poland, where a far larger portion of the population has no access to the Internet, an overwhelming majority of the people who do have Internet use it for social networking.

Germans and Japanese stand out among highly connected publics for their comparatively low levels of participation in social networking. While 31% of Germans use these types of sites, 49% go online at least occasionally but choose not to use them. In Japan, 24% are engaged in social networking, while 44% have Internet access but are not engaged.

Auschwitz Memorial Funding

Former Polish foreign minister Władysław Bartoszewski revealed the German government is paying $80 billion towards the upkeep of the former Nazi concentration camp Auschwitz memorial in Poland.

America and other EU countries will offer an equal amount. The initiative was pushed by Bartoszewski.

More than 150 buildings need to be preserved as well as personal belongings of the murdered inmates. Between 1940 and 1945, more than a million Jews, Gypsies and Poles were exterminated in Auschwitz and the neighbouring camp at Birkenau by Nazi guards.

"With this contribution, Germany recognizes its historic responsibility to preserve the memory of the Holocaust and pass it on to future generations," said German Foreign Minister Guido Westerwelle.

Wiki Leaks on Poland

Leaking

The website WikiLeaks has released thousands of secret and private documents embarrassing to the U.S. and many other nations. One confidential file deals with the US Embassy in Warsaw and how Poland’s foreign minister believes that NATO is a “toothless club” and the 2008 Russian invasion of Georgia justified Poland’s warning of Moscow’s “aggressive behavior”.

Foreign Minister Sikorski had complained that NATO has evolved into a political club with no teeth and warned that Poland would not be able to ignore a repetition of the Georgia scenario in Ukraine. He has also told U.S. officials that, in light of Russian excesses in Georgia, Poland's risky policy of arming the Georgians with shoulder-launched surface-to-air missiles proved the right thing to do despite United States government objections. Poland remembers all too well England and France not honoring their mutual defense treaty in 1939 when Poland was invaded.

Following the 2008 Russian-Georgian war the secret document quotes Prime Minister Donald Tusk as saying: “"Now do you see why we want Patriot missiles and further security guarantees (as requested during the Missile Defense talks)?"

The Obama administration has pulled the plug on the European missile shield, which was to have rockets stationed in Poland. In its place is a solitary Patriot missile battery with unarmed rockets, used for training only and rotates duties inside and out of Poland.

It has also come to light that Poland has been seeking a larger American troop footprint stationed on Polish soil given the aggressive actions by Russia and the apathetic stance by NATO command.

The EU’s Eastern Partnership policy, led by Poland and Sweden to bring former Soviet states closer to the EU is essential for securing Poland’s security.

Russian domination would jeopardize democratic transformation and - more importantly, would crush hopes that Belarus could become a buffer state between Poland and Russia.

See select previous posts:

http://polishtoledo.blogspot.com/2009/12/obamanation-in-poland.html#links

http://polishtoledo.blogspot.com/2009/09/obama-thorn-in-polands-side.html#links

http://polishtoledo.blogspot.com/2009/06/unarmed-patriots-for-poland.html#links

http://polishtoledo.blogspot.com/2009/02/us-promises-poland-patriot-missiles.html#links

http://polishtoledo.blogspot.com/2008/07/no-rockets-for-poland.html#links

http://polishtoledo.blogspot.com/2007/02/poland-as-missile-shield-base-saga.html#links

http://polishtoledo.blogspot.com/2007/01/is-us-anti-missile-system-on-polish.html#links

=  =  =  =

Columbus was Polish

In the past, I had advocated for changing the name of the capital of Ohio to Jan in honor of Jan z Kolno (John from Kolno, Poland). As legend has it, he sailed under the Danish flag to the eastern coasts of what are now Canada and the U.S. as far south as the mouth of Chesapeake Bay 16 years before Columbus got funding from Queen Isabella to set sail on the Niña, Pinta, and Santa Maria.

Now, I’m comfortable keeping our capital city named Columbus. Why? Simply because like Jan, Christopher Columbus was Polish !

Władysław III

Manuel Rosa, from Duke University, reveals the astonishing evidence about Columbus’ background in his new book COLON. La Historia Nunca Contada” (COLUMBUS. The Untold Story), just released in his native Spain. He says the explorer was not from a family of Italian craftsmen as previously thought, or even Portuguese as another group of historians believed - but the son of Władysław III, a self exiled King of Poland, which in itself is an amazing story.

“The sheer weight of the evidence presented makes the old tale of a Genoese wool weaver so obviously unbelievable that only a fool would continue to insist on it,” Rosa said.

The academic claims that the only way Columbus persuaded the Crown of Spain to fund his journey across the Atlantic Ocean was because he was royalty himself. For some reason he hid the true identity of his Polish biological father from most people during his lifetime, and history books have been none the wiser.

Nutty Conspiracies Are Real

“Another nutty conspiracy theory! That’s what I first supposed as I started to read... I now believe that Columbus is guilty of huge fraud carried out over two decades against his patrons,” said US historian James T. McDonough former professor at St. Joseph University.

Other historians first doubted Columbus’ Polish roots, but Rosa’s findings have been steadily gaining followers as the evidence comes to light.

“This book will forever change the way we view our history,” said Portuguese historian Prof. Jose Carlos Calazans. National Geographic is reportedly interested in making a documentary and the author is negotiating a deal.

Throughout the 1480s, when Columbus was in his 30s, he traded along the African coast and also sailed north to Ireland.

Sextant - the early GPS

Unlike what we were taught in school, modern historians believe it is a myth that ancient navigators thought the world was flat. Centuries before Columbus they had been using the stars at night as a primitive navigation system that assumed the earth was a sphere.

What sailors including Columbus didn’t know is how big the earth was, and how long it would take to sail round it.

When he convinced Spain to finance his voyage west in 1492, he underestimated the distance and thought that Asia would be where America is located. When he arrived in the Bahamas, Chris thought he was somewhere off the coast of China.



Haitian Polonians

 Columbus undertook three more return journeys across the Atlantic Ocean, each time hoping that he had found another part of Asia. He set up Spanish colonies and became governor of the Caribbean island of Hispaniola, home to modern day Haiti [see earlier post] and the Dominican Republic.

After Columbus’ death in 1506, European explorers continued to set up colonies and eventually empires in North and South America. Poles were even part of the first permanent English settlement at Jamestown and conducted the first labor strike in the "new" world.

Please see corrections to this post which I based on secondary sources. Corrections are submitted by Manuel Rosa himself. Click on comments to view.