FINANCE
What's behind the strange "game" the ECB on the coins printed (or not)?
Tuesday, June 29, 2010
the summer of 2007, one of the many unnecessary controversy that broke out in August, the then Prime Minister Prodi suggested the sale of Bank of Italy of the gold to cover a minimal portion of the debt. The matter was shelved for the dismissive response from the Governor of the Central Bank. The thing that struck me about this little controversy is the fact that summer to respond to the questionable release of Mr Prodi was not the Governor of the Bank of Italy, but the ECB, as if the gold deposited with Bank of Italy was owned by the ECB . But the gold, actually, is not even owned by Bank of Italy, but the Italian State.
It struck me very much the fact that no media, television or newspaper as it was, had noticed this aspect of the controversy. Another example of the dismissive tone with which the ECB officials are accustomed to dealing with the politicians we have had, a few years ago, the Minister Tremonti suggested as the ability to print banknotes in denominations of 1 and 2 euro, to help consumers understand the value of the euro held.
In this case, in addition to the contemptuous tone with which he was told "this is not on the agenda," the last sentence tells us something very interesting: "I do not know if the Italian minister is aware that it would lose the seigniorage income. " So, for own admission of a Governor of the Central Bank, the printing of money by the ECB, rather than by a sovereign state, is a monetary loss. And how is this loss?
The account is easily done: the currency is printed by the State as assets, while the one printed by the ECB (and the Bank of Italy) is one of the liabilities covered by assets that are government bonds, ie debt state that we all pay. In the end, the total loss is equal to 200% of the value of the currency printed. To be precise, this should still add interest paid by bonds. In this regard, there is an interesting aspect to be explored. What are the amount printed in different denominations?
reform that would make Tremonti, cited in the article, is a possible intermediate step of the concepts in above: tax the "things" (purchases, consumption) rather than "people" (revenue, income).
This will reward the production (revenue) and would allow everyone to free resources for consumption. But each person could decide for themselves their level of taxation in the same way it decides what to buy and how to spend their resources. The positive implications are endless, but for more information I refer you to various sites about these topics that are on the web.
We'll see if this time too Tremonti will force him to resign before he can reform the Italian tax authorities ...
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From:
ilsussidiario.net
FINANCE / Campiglio: the revolution tax Tremonti rewards work and family
Luigi Campiglio
Friday, December 18, 2009 Minister Tremonti has made a proposal to tax a genuine revolution, during a meeting with the unions, which remained under the plaster in the media, but it deserves instead of being re-launched and enhanced, as well as critically discussed. In his speech Tremonti has revived a theme of his past and thought that the opportunity to reverse the structure of tax revenues, increasing the share of taxation on the "things" while on "people."
The ratio of tax to GDP ratio in office, which typically covers income from employment, is much higher than that considers GDP inclusive of the underground economy, which has the grandeur to which it refers in statistics officers. Everyone agrees on the need to reduce tax evasion, but little has been discussed on whether it is easier to prevent evasion of direct rather than indirect tax evasion.
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Source:
http://www.ilsussidiario.net/articolo.aspx?articolo=56670
