Santa Clarita Living » Bank

Seigniorage, a word unknown

admin — Tue, 28 Apr 2009 17:47:10 +0000

Seigniorage is not a word is explained to us every day.
Around it will create several controversial but often are not taken into account.
I will only give a definition of this term that could be used later, perhaps in my other articles or you can hear it in the future.
The information that I found on this are not many, but investigating a fund you can find several articles and video.
The delivery system of money in the past worked well:
For every dollar paid out they needed a gold reserve to cover the disbursement of this money, because it was not in operation on the course and forced there to be able to change money with the gold going into the bank.
In the 70s, however, Nixon introduced the course forced, as the currency in circulation was too much compared to gold.
Only reason why $ 100 value $ 100 is the fact that we agree to that piece of paper worth $ 100.
Since then every issue of money is covered in part with the gold reserve and partly by issuing state bonds (debt).
But if the notes are why our debt?

Because in truth the banks are not government, but real companies.
They print money and LEND it to the state in exchange for securities (debt).
Then print a sheet from 0.05 cent (for example), but with a value of $ 100, and lend us generating debt.
The payment of this debt the bank will get $ 100 + interest – 0.05 cent.
Warning:
does not mean that all the debt is with the printing of banknotes, because inside there is the debt for public spending.
Understand this mechanism if we make appropriate notes in the portfolio, we can see that the ownership of money is not ours.
Top notes you can find the logo ECB, while on the coins minted by the Mint was not there are signs of the bank.
So here also explains why it is preferred to use up to 2 coins in Euro currency.
If they were printed in the paper would contribute to further increase the public debt.
Warning:
The bank decides monetary policy in relation to the economic policy of the states.
So the issue of banknotes is controlled, but the gain is banking that I have mentioned before.
This gain is called Signoraggio.
As the bank a private credit institution and has generated income is taxed and partly recovered by the state.
If you understand the system you may ask why we do not print?
Good question.
Starting from the history, it seems that since the beginning Roman is the state raised the cost of the printing press by giving to others, but UEL period coins were completely gold, and then for example:
100 coins in gold (20 grams of gold) worth 20 grams of gold that you had in your pocket and for which the value printed was equal to the value given in the system.
Over time, those who printed money have lightened the load of gold in the money and away from the real value and nominal value by separating the real one.
This until you comes to our times, in 1971 when Nixon completely block the exchange U.S. dollars gold.
Now we have discovered why not paintwork us, but why not go back to the old system (as do China and Cuba, which own banks)?
To this, I have not replied.
But we need a little ‘history.
Kennedy in 1964 tried to insert a coin and the state issued an order that allowed him, but unfortunately a few months later he was killed, and the measure was not used more, even if still in force.

The real estate market and the crisis

admin — Sat, 18 Apr 2009 17:41:52 +0000

As stated by many experts in the field, the housing market begins to be in crisis and have the first signs of slowing.
The report was produced by Nomisma and highlights some key data:

Price recorded the first decline of the last 11 years (-1%) even if compared to other countries like the U.S. (-16%) and Britain (-15%). But the most worrying concerns the solvency of the market.
Borrowers increasingly insolvent
According to the report of the property Nomisma in 2008 on the suffering loan will be in about 7 billion on residential market from 120 billion (5.5%). The ascent is clear: in 2006 the suffering amounted to 3.9 billion in the first half of 2007 had already increased to 4.6 billion to end 2007 at 5.1 billion and 5.6 billion still to June 30 2008.
In the second quarter of 2008, the contraction of credit given is of 7.9% -10.1% that is if we consider only those homes. Throughout the first half of this year is down 5.3%. A quarter of the current disbursements of loans are for replacement value in that account for 13% delivery of (3.76 billion over 29).
Market decline of 14%. Prices decreasing slightly (-1%)
In the first half of 2008, sales have decreased by 14 percent. By the end of the year the industry loses 24 billion turnovers. These means 160 thousand houses sold in less (-20%). A return to the levels in 2000-2001. The prices in the first six months of 2008 fell for the first time in 11 years, although in a low (-1%) compared to the rest of the world (-16% in the United States, -15% in England).

The data clearly describe a moment of economic crisis.
Money is finite and the Italians do not have the opportunity to purchase home and borrowing.
Furthermore, all have understood the negative period in loans; few people dare to bear so heavy a debt, knowing the consequences to which they meet.
Finally there is the deflation in the housing market, which consequently slows down the process.
If the house is now 100, I am sure tomorrow will cost 90, then wait 90, but after so that will wait 80 more, triggering a dangerous vicious circle that could cause further damage to the country.
Surely the price will bring more purchases over time in the housing market, but we must await the return of the Break Even Point, or the balance between demand and supply.

Banca Monte Parma and loans “flexible”

admin — Tue, 17 Mar 2009 17:28:52 +0000

This year’s Euribor reached historical peaks and has discouraged many people from buying a new home.
Banca Monte Parma thought to encourage the opening of a mortgage with a new product.
The flexible loans.
This kind of loan is characterized by a degree of flexibility granted by the bank to the customer.
Banco Monte Parma fact requires that the customer may have periods of crises, of varying severity.
Perceiving the period now before us has added three options to the obligor.

Skipping rata for those who after a year of signing the contract, with regular payments always have problems with payments and want to skip this installment. You can use this clause for a maximum of 5 times, each annually, following a request by registered letter 10 days before the usual deadline.
Exchange rate that allows you to switch from a fixed rate to a variable or vice versa, but your chance well, because you can do this only once for the duration of the loan.
Reduction of the installment and then extending the contract period. As in the previous clause is an option to play only once.

Overall the package is not male. Abbinato also to a lowering of rates for this period may be a good opportunity to open a fixed rate loan with these options.