http://globaleconomicanalysis.blogspot.com/2013/07/only-hope-for-italy-is-bankruptcy.html
EC: In Italy, the public sector is not intended as an aid to the production of wealth and public goods and services. It has been conceived as an observatory to generate political consensus and to please the own clientele. The concept of public is of assistance but not to the public, but the public sector employee. The beneficiary of the public sector is dependent on this sector, not the public.
LM: After six years of crisis we have more spending, more laws, more intervention, ... Where does change start?
EC: By the mentality. It has aggravated the welfare spirit that we have within us. The state is the problem, not the solution.
LM: It's counter-intuitive, but when politicians fail, they want more power. And politicians who are succeeding all want more power to the state. In Spain, demonstrations call for a public banking as a solution to problems. Can we escape this trap?
EC: If we think that the state is the solution, all the problems are going to focus in that perspective. The problem is cultural and ideological. It starts when our children go to school and get to talk about social justice. Children are taught the state should solve every problem: pensions, sickness, education ... The solution is to drop the veil that protects the state. In bankruptcy, people will realize that giving loans to the State, and state guarantees are useless.
LM: A few days ago there was a poll in which the public demanded more taxes.
EC: It is a matter of propaganda. The State says "do not worry, I will only raise taxes on the rich". However, the rich pay more, but also the poor. For example, in Italy, the Monti government introduced a tax on real estate, and 85% of Italians are owners. This is a middle class tax hike. And a country that stifles and suffocates its middle class can not grow.
LM: From your perspective as a university professor, do you have bad omens in regards to a lost generation for Italy and Spain?
EC: Yes and no, It could be 50 years, not just 15. The key will be in the new political class.
LM: Some people think it might not be so bad that we intervene. They prefer to let Germany or the troika decide instead of our politicians.
EC: Because the Germans have many Spanish and Italian bonds, they always favor higher taxation so Southern Europe can pay back those loans. I trust the Chinese more than the Germans. We need a new ruling class because the existing system is corrupt and must be eliminated - No IMF, EU bureaucrats, or Germany.
LM: Where to begin?
EC: You have to start by deregulation. Monti's government has made things worse, especially in the labor market. The regulation is where it was 10 years ago ... well, maybe as it was 150 years ago.
LM: It is always said that Spain and Italy need to get to compete globally, but many of the labor laws limit the growth of companies, with more regulation and more taxes to the largest companies.
EC: Yes, there are two elements. First regulation, both in general and the labor market in particular, changes to the size of companies. Often the entrepreneur thinks "it's not worth growing, because I will have many new demands." There is also an issue of tax evasion: it is much harder to do it when you're big. And finally, we have the element of funding. To grow need a functioning credit market. And in Italy in the last thirty years, the credit market has served to finance the public debt. There are so many resources that should be used to finance the growth of businesses, but only served to finance the growth of the state. As a result, businesses remain small, because they are funded with self-financing.
LM: Correct. But with this in mind, is there way out of this? Because Italian public debt is the highest in Europe after Greece.
http://www.zerohedge.com/news/2013-07-25/what-gold-nationalization-really-means
Submitted by Tyler Durden on 07/25/2013 19:40 -0400
Thursday, July 25, 2013 10:44 AM
Only Hope For Italy is Bankruptcy
Via Mish-modified Google translation from Libre Mercado (LM), Enrico Colombatto, Professor of Economics at the University of Turin says in an interview "The only hope for Italy is the bankruptcy of the State"
Enrico Colombatto (EC), Professor of Economics at the University of Turin and director of the Center of Economic Research in the Piedmontese town, offers a groundbreaking proposal: "Do not pay the debt."
It seems unthinkable, but he believes it will be the only way to start fresh, leaving those who have lent money to irresponsible politicians pay for their mistake.
LM: Spain and Italy have very large states, but they are very inefficient. Our laws are stifling, heavy.
EC: In Italy, the public sector is not intended as an aid to the production of wealth and public goods and services. It has been conceived as an observatory to generate political consensus and to please the own clientele. The concept of public is of assistance but not to the public, but the public sector employee. The beneficiary of the public sector is dependent on this sector, not the public.
LM: After six years of crisis we have more spending, more laws, more intervention, ... Where does change start?
EC: By the mentality. It has aggravated the welfare spirit that we have within us. The state is the problem, not the solution.
LM: It's counter-intuitive, but when politicians fail, they want more power. And politicians who are succeeding all want more power to the state. In Spain, demonstrations call for a public banking as a solution to problems. Can we escape this trap?
EC: If we think that the state is the solution, all the problems are going to focus in that perspective. The problem is cultural and ideological. It starts when our children go to school and get to talk about social justice. Children are taught the state should solve every problem: pensions, sickness, education ... The solution is to drop the veil that protects the state. In bankruptcy, people will realize that giving loans to the State, and state guarantees are useless.
LM: A few days ago there was a poll in which the public demanded more taxes.
EC: It is a matter of propaganda. The State says "do not worry, I will only raise taxes on the rich". However, the rich pay more, but also the poor. For example, in Italy, the Monti government introduced a tax on real estate, and 85% of Italians are owners. This is a middle class tax hike. And a country that stifles and suffocates its middle class can not grow.
LM: From your perspective as a university professor, do you have bad omens in regards to a lost generation for Italy and Spain?
EC: Yes and no, It could be 50 years, not just 15. The key will be in the new political class.
LM: Some people think it might not be so bad that we intervene. They prefer to let Germany or the troika decide instead of our politicians.
EC: Because the Germans have many Spanish and Italian bonds, they always favor higher taxation so Southern Europe can pay back those loans. I trust the Chinese more than the Germans. We need a new ruling class because the existing system is corrupt and must be eliminated - No IMF, EU bureaucrats, or Germany.
LM: Where to begin?
EC: You have to start by deregulation. Monti's government has made things worse, especially in the labor market. The regulation is where it was 10 years ago ... well, maybe as it was 150 years ago.
LM: It is always said that Spain and Italy need to get to compete globally, but many of the labor laws limit the growth of companies, with more regulation and more taxes to the largest companies.
EC: Yes, there are two elements. First regulation, both in general and the labor market in particular, changes to the size of companies. Often the entrepreneur thinks "it's not worth growing, because I will have many new demands." There is also an issue of tax evasion: it is much harder to do it when you're big. And finally, we have the element of funding. To grow need a functioning credit market. And in Italy in the last thirty years, the credit market has served to finance the public debt. There are so many resources that should be used to finance the growth of businesses, but only served to finance the growth of the state. As a result, businesses remain small, because they are funded with self-financing.
LM: Correct. But with this in mind, is there way out of this? Because Italian public debt is the highest in Europe after Greece.
EC: The only hope is the default by the State. We paid about 90,000 million euros in interest. And along with this, we have to face the return of credit. It can't be done.
LM: And the financial system does not collapse?
EC: Why? The underlying conviction is that we will emerge from the crisis by printing money. It is a politically attractive solution, but destructive. The last example in Europe led to Nazism. I do not think we'll get to that, of course, but inflation certainly create social problems and tensions. The question is who should pay? The one who has financed the bad debtor [Spanish or Italian politicians] or the community via higher taxes? The European socialist solution is that losses should be disseminated throughout the population. But this has failed.
http://www.zerohedge.com/news/2013-07-25/what-gold-nationalization-really-means
What Gold Nationalization Really Means
Submitted by Simon Black via Sovereign Man blog,
Gold owners are almost universally familiar with the story of Franklin Roosevelt criminalizing the ownership of gold back in 1933.
Executive Order 6102 was signed on April 5, 1933, and it forbade the “Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States.”
Roosevelt further ordered that citizens in the Land of the Free surrender their gold to the Federal Reserve in exchange for $20.67 per troy ounce in Federal Reserve notes.
The term gold ‘nationalization’ is often thrown around. But remember, with nationalization, it’s the state that takes control of an asset.
Executive Order 6012 took assets from private individuals, and then gave those assets to a private company – the Federal Reserve. This isn’t nationalization. It’s just theft.
You’d think that the entire nation would have been in an uproar. But surprisingly, this wasn’t the case.
In fact, the Executive Order didn’t even make the front page of the New York Times, whose main headline the day after was “BEER LEGAL AT MIDNIGHT”.
It just so happened that prohibition was starting to be repealed right when Roosevelt’s order was going into effect. So people were too distracted with their pent-up, alcohol-induced euphoria to really notice. Very clever timing.
Of course, Roosevelt was not the first, nor the last, to confiscate citizens’ gold. One of my favorite stories involves Charles I of England, who commandeered 200,000 pounds of gold in 1638 as the English Civil War was approaching.
This gold belonged to private citizens, not to Charles. The rightful owners trusted their king and were storing their gold at the national mint for safe keeping.
This trust proved to be misplaced. And Charles seized the gold, calling it a ‘loan’ (upon which the English government subsequently defaulted).
This theme is consistent across history– governments have a notorious, unblemished track record of fleecing their citizens, particularly in times of desperation.
History shows that the likelihood of a government pillaging its citizens’ wealth is directly proportional to that government’s fiscal health.
Looking back, it seems so obvious. I’m sure the day after the bank account freeze in Cyprus earlier this year, people were probably thinking, “Wow, I can’t believe I didn’t see that coming…”
Nearly the rest of the West is in the same position, or worse off, than Cyprus– overextended banking systems, interminable deficits, unsustainable debts, and strong precedents of setting the law aside to violate people’s freedom.
All the warning signs are there. And just as in Cyprus, or in 17th century England, it’s going to be so obvious looking back.
This is one of the reasons why it’s so important to be proactive now and move a portion of your assets abroad where they can’t grab it.
As an example, there’s a fantastic private, secure storage facility here in Vienna called Das Safe that I’ve been writing about for a long time.
Das Safe has been around for three decades. And because they’re not connected to any bank or government, it’s possible to anonymously rent a safety deposit box where you can store gold.
Under current US law, this is not reportable… so you can truly hold your savings privately, outside the banking system.
Of course, gold is just one asset to think about. There’s another asset that I’m even more concerned about governments stealing: retirement accounts. More on that another time.
No comments:
Post a Comment