Roman Pilíšek (Zlaté rezervy)
Investor's window  |  November 02, 2012 15:27:18

He's going to attack next inflation on savings Czech savers?


First 10th 2012 Economic gave a newspaper interview the current Governor of the Czech National Bank Miroslav Singer.  If the Board of the CNB decided to follow his words, one would this behavior be described as another attack on savers savings. The subject of this text is to identify the causes of these steps and the search of Defense for holders of cash savings.

CNB's inflation target is illegitimate

First we should look into the Constitution of the Czech Republic, which in chapter six of the Czech National Bank, specifically in Article 98, paragraph (1) writes:   "The Czech National Bank is the central bank of the state.   The main goal of its activities is to maintain price stability, in its activities are permissible only on the basis of law. "5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; LETTER-SPACING: normal; COLOR: rgb (51,51,51); WORD-SPACING: 0px; PADDING-TOP: 0px;-webkit -text-size-adjust: auto;-webkit-text-stroke-width: 0px "> However, price stability, the CNB interpreted as follows:   "CNB, like most central banks, focusing primarily on the stability of consumer prices. In practice, price stability usually not literally mean no changes, but their moderate growth. In March 2007, he was declared the new inflation target of 2% effective from January 2010, with the CNB will be like now strive to ensure that actual inflation does not differ from the target by more than one percentage point in either direction. "5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; LETTER-SPACING: normal; COLOR: rgb (51,51,51); WORD-SPACING: 0px; PADDING-TOP: 0px;-webkit -text-size-adjust: auto;-webkit-text-stroke-width: 0px "> In a simple comparison of the wording of the Constitution and its interpretation by the Czech National Bank, there is a fundamental contradiction. Pricing  stability   There is only one and it is precisely the strength and stability of prices, and if any change should occur, why only words CNB upwards? Why not down? Why, in this day and age where technology and progress aim to raise living standards, there must be inflation target (plan) CNB set at 2% per year?

The root cause is setting the rules functioning of the money market.

Current money is not real money, as known by our ancestors. Thus, a commodity that had to be the bearer of values ??(corn, gold, silver, etc.). Current money is just debt that arises in the fractional reserve banking. Ie., Banks accept deposits and even though they promise to pay at any time on demand deposits, these deposits lend. According to CNB  commercial banks can borrow in the Czech Republic to 98% thus saved money. So when the bank lends the money, not only that it becomes insolvent, but also created new money, which is a new contribution. In principle, therefore, all the money in debt, of which they have to pay interest on normal commercial banks. Not by chance is one of the most profitable banks just . Thus, if the system ever created new, no fiat money, these must be new money in the system constantly manifest (since 1993 increased the money supply in the Czech Republic from 500 billion to 3,000 billion, ie 6x). One of the manifestations is just an increase in consumer prices. 5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; FLOAT: none; LETTER-SPACING: normal; COLOR: rgb (51,51,51); WORD-SPACING: 0px;-webkit-text -size-adjust: auto;-webkit-text-stroke-width: 0px "> Contemporary banking system is essentially insolvent and shameful as it lends money he had been lent, but entrusted to the care of (more  5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; LETTER-SPACING: normal; COLOR: rgb (179156.0); BORDER-TOP: 0px; BORDER-RIGHT: 0px; WORD-SPACING: 0px; TEXT-DECORATION: underline; PADDING-TOP: 0px;-webkit-text-size-adjust: auto;-webkit-text-stroke-width: 0px " target = _blank> here). It creates inflation and consumer price growth and the CNB is just trying to justify it (inflation target). Furthermore, it has great power over the government, since this financial system is the most important creditor country (banks hold 39% of the national debt).   To understand the monetary system, we recommend you to read a book  "Money in the hands of the state" .

And now to the words of the Governor Singer
5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; LETTER-SPACING: normal; COLOR: rgb (51,51,51); BORDER-TOP: 0px; BORDER-RIGHT: 0px; WORD- SPACING: 0px; PADDING-TOP: 0px;-webkit-text-size-adjust: auto;-webkit-text-stroke-width: 0px "> today's central bankers and financiers have essentially one common enemy, and that is the decline in GDP and a decline in prices. reason is obvious: if all contemporary money debt, then one must also pay interest. And if the economy does not generate sufficient added value that would interest paid, then there bankruptcies of borrowers and instability of the financial sector. therefore CNB the collapse of Lehman Brothers in 2008 reduced the interest rate to the current 0.25%.CNB is now in a situation where no where to interest rates drop, and thus support our belief in open economies will sooner or later try to reduce the rate of the Czech koruna against other currencies. Incidentally, the same policy applied by other Western central banks from Switzerland, ending with the U.S. and Japan. What does it matter that domestic firms not so worried about exchange rate of the Czech koruna as the constant regulation and state intervention. One example is a solar boom that was built here by generous state subsidies and significant bank loans. Undermined the competitiveness of Czech industry to such an extent that sooner or later be reflected in a decline in its performance and consequently in an increase in unemployment.

But it came to pass, and so starts monetary policy of the Czech National Bank Singer words:  "Every central bank may intervene to its own currency in uncapped volume. Because it only needs its own currency and issue checks, in other words, you can make money. IF you are willing to accept the consequences of inflation or deflation defending, the possibilities are limitless. "

Attack on savers savings we have in mind is the "inflationary consequences", which refers to the governor here. Intervention mechanism is simple. Czech National Bank will be in the currency market by using their power ("make money") to purchase for Czech crowns foreign currency. We can assume that he selects some exchange rate of the koruna against the euro and it will be stably maintained. For example CZK 26.00 per euro. If the crown will strengthen through this course, the Crown will sell and buy the euro. And if this course will not be "ex officio" sufficient, it can pick up where they want.

13px/19.5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; LETTER-SPACING: normal; COLOR: rgb (51,51,51); BORDER-TOP: 0px; BORDER-RIGHT: 0px , WORD-SPACING: 0px; PADDING-TOP: 0px;-webkit-text-size-adjust: auto;-webkit-text-stroke-width: 0px "> These currency manipulation will seek central bank to increase the competitiveness of exporters and subsequently completely against the wording of the Constitution will strive to increase the price level to the level of its "inflation target".
A direct consequence of monetary intervention is not only higher competitiveness of exported goods and services, but also to increase the price of imports. Tj. oil, natural gas, uranium, semi-finished and foods that are not grown (coffee, tea, exotic fruits, etc.). By increasing the price and reducing the standard of living has apparently CNB words Singer fight   "Depression of Czech consumers." He thinks that the market manipulation increases economic activity. In other words, he wants people to either 1) began to consume their savings, or 2) to be more in debt.

5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; LETTER-SPACING: normal; COLOR: rgb (51,51,51); BORDER-TOP: 0px; BORDER-RIGHT: 0px; WORD- SPACING: 0px; PADDING-TOP: 0px;-webkit-text-size-adjust: auto;-webkit-text-stroke-width: 0px "> Central bankers are not able to understand that these steps only increments another log to the fire. thinks that if they raise consumer prices, they will force savers to consume. However, this is a profound mistake. People are aware after all, why save.'m not blind. sees that he only everywhere and just expensive. sees that this state has it still has to maintain the standard of living of pensioners to such figures as promised. People see that the health system is in decline and from month to month does not have the funding previously approved drugs, etc..We could go on forever, but the result of this behavior can be seen in the results of regional and Senate elections, when voters brought to power after 20 years of communist.

How to defend against printing money?

State institutions can not and will not fulfill the role of a good manager, because the state is represented by people who have only just pursue their interests. We find numerous examples of corruption and hype, which is a consequence of increasing the power of the state over the citizen. State under the weight of their problems fully undresses and shows its true face. Increasing taxes, reducing the degree of freedom and prefers one interest group against the other, depending on the current layout of political power. Some entities, nor change the layout of forces in Parliament are not affected.

5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; LETTER-SPACING: normal; COLOR: rgb (51,51,51); BORDER-TOP: 0px; BORDER-RIGHT: 0px; WORD- SPACING: 0px; PADDING-TOP: 0px;-webkit-text-size-adjust: auto;-webkit-text-stroke-width: 0px "> The citizen who still believes in the fact that stealing is wrong to live for debt is wrong and believe in the fundamental values ??of society, such as doing good, ie offer of himself what the market demands and thus deserve a reward should look for another attack on their savings to proceed with the measure, which some have held.

Some bases

OUTLINE-WIDTH: medium; PADDING-RIGHT: 0px; FONT: 13px/19.5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; LETTER-SPACING: normal; COLOR: rgb (51.51, 51); BORDER-TOP: 0px; BORDER-RIGHT: 0px; WORD-SPACING: 0px; PADDING-TOP: 0px;-webkit-text-size-adjust: auto;-webkit-text-stroke-width: 0px "> Exactly how central bankers dictate to us forsake possession of the Czech crown and replace it tangible good. however, we should avoid consumption and other debts. Granted priority to investment. reduce its economic dependence on the state and its services.

5px Arial, Helvetica, sans-serif; WHITE-SPACE: normal; Orphans: 2; LETTER-SPACING: normal; COLOR: rgb (51,51,51); BORDER-TOP: 0px; BORDER-RIGHT: 0px; WORD- SPACING: 0px; PADDING-TOP: 0px;-webkit-text-size-adjust: auto;-webkit-text-stroke-width: 0px "> Examples:

-Webkit-text-stroke-width: 0px "> If you own a house and you have the slightest chance to develop self-sufficiency in water, then do so. Drilling wells is a way of paying for water and no VAT on this service.

If you are able to increase their independence from natural gas or heat supplied from the heating plant, then do so. Boiler burning wood is a welcome way to save on VAT and not on foreign supplies of raw materials dependent. The price of gas is directly dependent on currency interventions CNB.

If you can extract your garden, it is best to do so. In the case of increasing fuel prices will increase the prices of food products. If it continued deficit financing of the European Commission, the European Union will no longer be able to finance agricultural production subsidies as before.In the worst case, it will continue to regulate utility breeding animals and interfere with the rules of the breed. The increase in prices of eggs is one of the few examples. Again, you do not pay VAT.

Behave bees. They carry with the proper storage practically incorruptible honey (without VAT - except dokrmování) and you increase the yield of agricultural production.

Buy to stock imported foods whose price is directly related to reducing the purchasing power of Czech crowns (coffee, tea, etc.). '

Part of the funds to move into tangible, highly liquid commodities. Top investment gold is exempt from VAT.

In case you have more savings, then it is advisable to decide to buy an apartment smaller dimensions. Even though housing prices may continue to decline slowly, people will increasingly turn to the housing rent.This is because the declining living standards of the population - especially young people. They are not able of their income to allocate enough funds to mortgage housing (despite low interest rates).

In the case of other investments may seem advantageous prices of some shares carrying dividend. Here, however, you have to find a real professional.

If you are thinking about saving through pension funds, carefully read the terms and conditions. According to us, this so-called private pension system in the contemporary financial system for savers totally dysfunctional. Pension funds finance the national debt from 20% already, and once these funds will drain more resources than pouring into them, then there is reform. Incidentally, this is one of the fundamental reasons why the current reform so current.The state is dependent on foreign sources, because it is in constant deficit management. Pension funds not earn enough on consumer prices, and savings funds are being undermined. Quality source of revenue for the state, a substantial loss for savers.

In conclusion

Central bankers are increasingly "feel responsible" for its economy and also protects among other reasons for their existence. Therefore, even at the cost of high inflation will sustain the current financial system, which is built on the false money. Inflation assault on domestic savings through currency intervention is apparently irreversible.

-Webkit-text-stroke-width: 0px "> Roman Pilíšek
Chief Economist at GOLD RESERVES

Roman Pilíšek (1980)

je absolventem Univerzity Tomáše Bati ve Zlíně, kde se specializoval na problematikou akciových a komoditních trhů. Následně získal pracovní zkušenosti ve finančním a bankovním sektoru. Je velkým zastáncem rakouské ekonomické školy a v současné době působí jako hlavní ekonom společnosti ZLATÉ REZERVY s.r.o. Jeho posláním je publikační činnost, ekonomické analýzy a komentáře. Dále je zodpovědný za privátní divizi Private & Corporate Assets.

Společnost ZLATÉ REZERVY s.r.o. patří mezi přední tuzemské obchodníky s investičním zlatem. Pobočky má ve Zlíně a v Praze a provozuje největší internetový portál o investičních kovech www.zlaterezervy.cz, který přináší denní zpravodajství, odborné články, videa, unikátní grafy s aktuálními cenami, technické analýzy a eobchod.

Was this article: 10 | 8 | 6 | 4 | 2 | 0


Last news from the section Investor's window:

Čt 14:42  Jednoduché pravidlo jak zvýšit své šance vydělat na akciích Filip Přibáň (AKCENTA CZ)
St   9:53  Short signál na akcie Deutsche Bank (18.10.2017) Jonáš Mlýnek (LYNX)
Út 12:53  Vliv na trhy měly nejen centrální banky Patrik Hudec (Generali Investments)
11.10.2017  Zlato – propad zastaven právě včas - (analýza grafu) Ing. Zdeněk Ďuriš (EKKA-Gold s.r.o.)


Zobrazit sloupec 
Moner | ISIN database | Weather forecast
Česká verze
Kurzy.cz - Akcie cz, kurzy měn, forex, zlato.
Favorite: Prague Stock Exchange Czech crown Czech economy Commodities Gold Trademarks Prague Weather

Copyright © 2000 - 2017

Kurzy.cz, spol. s r.o., AliaWeb, spol. s r.o.,

ISSN 1801-8688