Spain - Next For The Brussels Muscles?

[woody2]

I've owned property in Spain for 10 years. I'm in Spain now. I've had building extensive work done. I employ spaniards. Yes, like IOM there is a cash economy, people hate paying VAT and Social taxes but the vast majority of those who are working or running businesses are legit, issue invoices etc. some of the unemployed, especially those out of work for 12 months or more, who lose benefits, will work cash in hand, yes in tourist areas there lots of crime directed at tourists.

 

But look at the official size of the economy and contrast the population and unemployment rates (it's somewhere between the 11 to 15th largest industrial economy, depends which stats you read) and it's clear that the economy is mainly legit, not mainly cash.

 

Woody, you used mainly, which means 50% plus, as your descriptive adjective of choice. You've now retreated to a hell of a lot, I'd say there is some. There is some in most places.

my brother in law is a general in the guardia civil, my sister having lived out there for 30+ years. i often stay in cuartel's when working out in spain. away from the tourist areas inland most transactions and work is done by cash, my sister having built many properties, i think i have a better idea what is happening on the ground

[woolley]

Amazing how when you show the cash all thoughts of siesta disappear, and los españoles are happy to slave through the heat of the day for weeks on end to get that job that was officially impossible done in short order. (And in fairness to very high quality too.)

[hillshepherd]

 

 

Yes indeed, if Fractional Reserve Banking was banned over night, the supply of money would drop, so it needs to be replaced with a system that keeps the supply of money more stable. by money I mean the ones in bank accounts, the paper and coin money is fine.

 

Could These 3 Simple Changes to Banking Fix the Economy? http://www.positivemoney.org/

 

 

 

 

Woah, that's some leap. Fractional Reserve Banking is a way of creating liquidity through debt. You need debt, it oils the wheels. Any time anyone's tried to remove these systems people have created their own to replace them. The nonsense positive money are spouting has been argued since money was first used, these aren't new views. They're still wrong.

 

Look at bitcoin, that's largely what you're talking about and it's got a liquidity problem. It's hoarded and not spent. It's not the solution.

 

That's not to say there aren't issues with the current system, we'eve seen that with the crisis. Bad debt, bad risk management, complex instruments etc. Can be improved, but I don't see how you'd replace it.

 

 

 

 

You are right Fractional Reserve Banking is a way of creating liquidity through debt. Which is the boom time, but then you get the bust. When the money supply contracts because people and business can't pay the debt back. One idea is to let the banks keep not just the interest but the principle of the loan as well, the catch being the reserve ratio would be 1 to 1 in other words for every 1 pound in the bank they can loan out 1 pound. This would take time to work its way through the system, so the Bank of England would be responsible for making sure the banks can get loans from the BOE to keep there reserves up. Eventually the money supply would be stable. As for the Bitcoin example it's not that easy to spend it on goods. I looked at a online map of where you can spend Bitcoin on the IOM, it showed only 1 place, so its not much use at the moment, until people accept it for payment of goods and services.

 

http://www.bitcoinmaps.org/

 

 

 

 

As I've said before it does create liquidity when more people and businesses take out more loans, but that can't go on for ever, as amount of new loans drops the liquidity drops. Banks think charging interest on money created out of thin air, is a great idea, until the system crashes then they demand bail outs. Getting back on topic, the post I made about Spain charging a Tax on bank deposits, may cause the big depositors to move money to other overseas banks, which will mean the Spanish banks will find it harder to make new loans, which will contract the liquidity further.

 

 

the only "real" store of value is gold bullion and land,no ifs buts or any other tripe bankers/lawyers would have you believe,people have been brainwashed that "fiat" money is actually worth anything,ffs its paper and worth what governments say its worth! remember harold wilsons bare faced f*cking lies,i would'nt like to be at the end of the queue when the real value is decided,meanwhile bullion has held its value since the roman empire times,and when we have a licensed bullion dealer with secure vaults setting up recently on the island,https://www.imgold.com/affiliate-programme this is where a lot of real money now resides reducing the "fiat" supply.

You can't introduce something like charges on deposits without implementing some form of capital controls, as capital will flow to wherever it gets the best return so the big institutional money will just leave the country, having the negative effect it was trying to avoid. The whole system is flip flopping around trying to plug the holes in the dyke and as everything is connected a decision in one area results in a bubble elsewhere. All the while governments are trying to raise taxes everywhere to grab more of the pie, again meaning less liquidity at a time when they need economic growth. It's absurd.

http://www.slate.com/blogs/moneybox/2013/08/09/economics_of_goldfinger_bond_bretton_woods_and_harold_wilson_s_austerity.html

https://www.youtube.com/watch?v=-IHVQU9BSks

http://taxfreegold.co.uk/devaluation.html

thanks to the www the above info is now available to all and the manipulators of this world no longer control the info as they used to via their puppies(the newspapers and tv.

[Thomas Jefferson]

That's because REAL capitalism works. What we have in the IOM with the financial sector is not capitalism. In a real capitalist economy, most if not all of these banks would have gone bust decades or centuries ago and more honest, better self-regulated banks would have replaced them. Give people a bit of real capitalism and they begin to prosper. I don't see a problem with people exchanging goods and services behind the government's back to avoid tax. I think taxing people and businesses so much is the problem. As usual, the insider corporations and mega banks are exempt anyway, so why shouldn't us commoners be able to do the same?

[Thomas Jefferson]

Amazing how we live in an age where real forms of capitalism are labelled "black marketeering" and criminalised, while the establishment's own tax exempt criminal system of exploitation and parasitism is legal and heavily subsidised by the public. Just shows how far gone we are.

[John Wright]

 

 

I've owned property in Spain for 10 years. I'm in Spain now. I've had building extensive work done. I employ spaniards. Yes, like IOM there is a cash economy, people hate paying VAT and Social taxes but the vast majority of those who are working or running businesses are legit, issue invoices etc. some of the unemployed, especially those out of work for 12 months or more, who lose benefits, will work cash in hand, yes in tourist areas there lots of crime directed at tourists.

But look at the official size of the economy and contrast the population and unemployment rates (it's somewhere between the 11 to 15th largest industrial economy, depends which stats you read) and it's clear that the economy is mainly legit, not mainly cash.

Woody, you used mainly, which means 50% plus, as your descriptive adjective of choice. You've now retreated to a hell of a lot, I'd say there is some. There is some in most places.

my brother in law is a general in the guardia civil, my sister having lived out there for 30+ years. i often stay in cuartel's when working out in spain. away from the tourist areas inland most transactions and work is done by cash, my sister having built many properties, i think i have a better idea what is happening on the ground

Don't assume I'm on the coast or in a tourist area or a Brit enclave. I'm in a rural county, sparsely populated, and the building was semi derelict when I bought. It's really little different cash economy wise to IOM. Maybe Catalunya is different to where you stay. But the fact is that the economy is not mainly cash.

[Slim]

According to studies, the spanish underground economy is about the average for europe. It's double the estimate for the UK, but behind the likes of Greece. This from the Visa report:

The Spanish result, is close to the European average however. What does emerge very strikingly from the published figures is a three way split between western European countries, southern European countries and eastern European countries. Regarding southern European countries Spain’s results place the country in equal fourth place with Portugal behind Turkey, Greece and Italy with Greece and Italy having grey economies to the value of respectively 24 per cent and 21 per cent of GDP. Compare this to some typical figures in the Western European countries with the UK at 10 per cent,Germany 13 per cent in Austria at 8 per cent. Moving on to Eastern Europe we see Bulgaria at 31 per cent and Romania, Croatia, Lithuania and Estonia 28 per cent of the GDP’s respectively.

Hard to find the actual post in this bloat, but:

the only "real" store of value is gold bullion and land,no ifs buts or any other tripe bankers/lawyers would have you believe,people have been brainwashed that "fiat" money is actually worth anything,ffs its paper and worth what governments say its worth!

Nonsense.

[pongo]

 

the only "real" store of value is gold bullion and land,no ifs buts or any other tripe bankers/lawyers would have you believe,people have been brainwashed that "fiat" money is actually worth anything,ffs its paper and worth what governments say its worth!

Nonsense.

Yep. Gold is an arbitrary store of value or token of exchange. Really not so different from govt or bank issued money. Ok - it also has some industrial uses. But the supply of gold far exceeds any industrial demand. The value of gold is largely imaginary.

 

The people who argue for gold are people who do not understand money (or the cyclical nature of economies). You can get a sense of gold being exactly like any other form of money if you look at the economic effects of the 19th century goldrushes. The quantity of gold in the system dramatically increased. This boosted the economy and was also inflationary - just the same as if the govt had started printing money. Leading, arguably, (certainly contributing) to a series of crashes, depressions etc. no different. No new actually value was added because gold has very little actual value.

 

It's weird these days to hear people with no background using terms like fiat currency because they heard it on Max Keisser or some conspiracy forum. I hate the way in which conspiracy thinking has gone mainstream.

[ike]

The good thing about a gold-backed currency is that it's a finite resource so you can't have artificial bubbles with it. The mass importation of South American gold by Spain in the late 15th and early 16th century being an exception which is unlikely to be repeated now that we have global markets. The problem with our current system is that the governments or central banks can just print more and more money out of thin air, or even do it digitally, and then start charging interest on it. This is a form of stealth taxation which especially hits the poorest members of our society, the people on fixed incomes.

[ike]

(A stealth taxation because printing more money means the existing money supply becomes worth less through inflation).

[Slim]

The good thing about a gold-backed currency is that it's a finite resource so you can't have artificial bubbles with it. The mass importation of South American gold by Spain in the late 15th and early 16th century being an exception which is unlikely to be repeated now that we have global markets. The problem with our current system is that the governments or central banks can just print more and more money out of thin air, or even do it digitally, and then start charging interest on it. This is a form of stealth taxation which especially hits the poorest members of our society, the people on fixed incomes.

Agree with pogo, posts like this seem increasingly common, rising with 'troother' youtube bollocks and conspiracy nutters getting far wider coverage. Why anyone would think a currency backed by a volatile gold price is better than via monetary policy is beyond me.

 

Of course, there's no examples to prove this, as currencies are sensibly no longer based on gold standard.

[ike]

There's one born every minute.

[Slim]

There's one born every minute.

Oh yeah, I'm the sheeple because I don't hang off dribbling youtube nutjobs every word.

[ike]

http://www.ronpaul.com/on-the-issues/fiat-money-inflation-federal-reserve-2/

[woody2]

 

 

 

I've owned property in Spain for 10 years. I'm in Spain now. I've had building extensive work done. I employ spaniards. Yes, like IOM there is a cash economy, people hate paying VAT and Social taxes but the vast majority of those who are working or running businesses are legit, issue invoices etc. some of the unemployed, especially those out of work for 12 months or more, who lose benefits, will work cash in hand, yes in tourist areas there lots of crime directed at tourists.

But look at the official size of the economy and contrast the population and unemployment rates (it's somewhere between the 11 to 15th largest industrial economy, depends which stats you read) and it's clear that the economy is mainly legit, not mainly cash.

Woody, you used mainly, which means 50% plus, as your descriptive adjective of choice. You've now retreated to a hell of a lot, I'd say there is some. There is some in most places.

my brother in law is a general in the guardia civil, my sister having lived out there for 30+ years. i often stay in cuartel's when working out in spain. away from the tourist areas inland most transactions and work is done by cash, my sister having built many properties, i think i have a better idea what is happening on the ground

Don't assume I'm on the coast or in a tourist area or a Brit enclave. I'm in a rural county, sparsely populated, and the building was semi derelict when I bought. It's really little different cash economy wise to IOM. Maybe Catalunya is different to where you stay. But the fact is that the economy is not mainly cash.

 

 

 

 

I've owned property in Spain for 10 years. I'm in Spain now. I've had building extensive work done. I employ spaniards. Yes, like IOM there is a cash economy, people hate paying VAT and Social taxes but the vast majority of those who are working or running businesses are legit, issue invoices etc. some of the unemployed, especially those out of work for 12 months or more, who lose benefits, will work cash in hand, yes in tourist areas there lots of crime directed at tourists.

But look at the official size of the economy and contrast the population and unemployment rates (it's somewhere between the 11 to 15th largest industrial economy, depends which stats you read) and it's clear that the economy is mainly legit, not mainly cash.

Woody, you used mainly, which means 50% plus, as your descriptive adjective of choice. You've now retreated to a hell of a lot, I'd say there is some. There is some in most places.

my brother in law is a general in the guardia civil, my sister having lived out there for 30+ years. i often stay in cuartel's when working out in spain. away from the tourist areas inland most transactions and work is done by cash, my sister having built many properties, i think i have a better idea what is happening on the ground

Don't assume I'm on the coast or in a tourist area or a Brit enclave. I'm in a rural county, sparsely populated, and the building was semi derelict when I bought. It's really little different cash economy wise to IOM. Maybe is different to where you stay. But the fact is that the economy is not mainly cash.

i know catalunya well, the area with the largest population in spain, no doubt you will be in the peña tonight? try going a bit more inland from the tourist areas