Monday, January 27, 2014

German Bundesbank proposes private wealth tax

Monetary system change can take a lot of different forms.

Here is one proposal that tells us we are far from out of the woods with problems in the current financial system.  The German Bundesbank today calls for a private wealth tax (bail in) for countries that are in trouble debt wise. This follows a very similar IMF proposal in October last year. Another signpost to watch for. A financial system not under stress does not need to impose a one time private wealth tax. A stressed system would be the precursor to major changes. 

Here is quote from the article:

"The International Monetary Fund discussed the option in a report in October and said that reducing debt ratios to end-2007 levels for a sample of 15 euro area countries, a tax rate of about 10 percent on households with positive net wealth would be required."

Meanwhile, China is clearly behind the curve. They are still doing the old fashioned bailout thing. Bail outs, Bail ins, Currency devaluations, all signs of stress. It's why we are keeping an eye on things here.

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