PBL150 > 152 - Caravan Park REPAID

I find it very hard to believe that the risk of this actually happening is as likely as you perceive it to be.  However, if you really do hold the view that the entire financial system is at risk, then you should probably be stocking up on Gold.

It's already part of my portfolio. From the IMF, and who gave them this idea? How about the governments involved?


""The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”— a one-off tax on private wealth—as an exceptional measure to restore debt sustainability. The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair). There have been illustrious supporters, including Pigou, Ricardo, Schumpeter, and—until he changed his mind—Keynes. The conditions for success are strong, but also need to be weighed against the risks of the alternatives, which include repudiating public debt or inflating it away (these, in turn, are a particular form of wealth tax—on bondholders—that also falls on nonresidents)

There is a surprisingly large amount of experience to draw on, as such levies were widely adopted in Europe after World War I and in Germany and Japan after World War II. Reviewed in Eichengreen (1990), this experience suggests that more notable than any loss of credibility was a simple failure to achieve debt reduction, largely because the delay in introduction gave space for extensive avoidance and capital flight – in turn spurring inflation.

The tax rates needed to bring down public debt to precrisis levels, moreover, are sizable: reducing debt ratios to end-2007 levels would require (for a sample of 15 euro area countries) a tax rate of about 10 percent on households with positive net wealth(*).

(*) IMF staff calculcation using the Eurosystem’s Household Finance and Consumption Survey; unweighted average.""

A capital levy doesn't have to be levied on bank accounts. It could be levied instead, for example, on equity/fund portfolios of more than £1m. Another alternative would be a one-off hike of tax rates on income over £100,000.

LTV Schmall Tevee, this is SS we're dealing with ........................

LTVs eh?  Not what they once were in my day. 

As far as I'm concerned the British Government, as a result of artificially low interest rates, have been raiding 'savers' accounts for several years now. The Cypriot Government were just more open about it!

Indeed we are. I, on the other hand, am in the Eurozone and have friends who had money confiscated in Cyprus. I mentioned that I was particularly talking about the Eurozone earlier. I don't do paranoia. An earlier poster suggested that this would not happen because the Tories will protect the rich, and you made exactly the point I was going to make. The very rich would not be badly effected, only the middle classes.

Now, where are our loans!

Is anyone expecting this to go live today?

I expected it to go live 1st thing this morning.