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And the Italian central bank should permit this for what reason?

The alternative is to stop all cross-border transactions which would also result in a total collapse of the economy. But the savvy investors will park their ill gotten gains in safe havens long before that will happen. As always, it is the average Joe that's going to foot the bill.
Savers have no macroeconomic function.

Savings are necessary to fund industrial production.
Money can be printed.

Wealth cannot be printed. Printing money destroys wealth.
But if you just want cheap paper money to paper your walls, I dare say, the money printers have a point.
by The European on Mon Mar 11th, 2013 at 08:08:06 AM EST
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Savings aren't wealth either. They are claims on wealth. Not exercising them now just leads to reduced demand in the present.
by generic on Mon Mar 11th, 2013 at 08:22:12 AM EST
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Thus we are so sensible, have schooled ourselves to so close a semblance of prudent financiers, taking careful thought before we add to the "financial" burdens of posterity by building them houses to live in, that we have no such easy escape from the sufferings of unemployment. We have to accept them as an inevitable result of applying to the conduct of the State the maxims which are best calculated to "enrich" an individual by enabling him to pile up claims to enjoyment which he does not intend to exercise at any definite time.
(Keynes)

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Mon Mar 11th, 2013 at 08:27:23 AM EST
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Savings are necessary to fund industrial production.

Savings = Investment, eh?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Mon Mar 11th, 2013 at 08:28:06 AM EST
[ Parent ]
Oh boy, here we go again.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sun Mar 17th, 2013 at 11:23:16 AM EST
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The alternative is to stop all cross-border transactions which would also result in a total collapse of the economy.

This is not the Argentine nor the Icelandic experience.

But the savvy investors will park their ill gotten gains in safe havens long before that will happen.

Some of them undoubtedly will, but invasive and heavy-handed money laundering laws and selective default on central bank balances against known pirate banking states can go quite a long way toward retroactively enforcing a corralito.

As always, it is the average Joe that's going to foot the bill.

If the average Joe's losses from the present depression can be stopped at merely wiping out his savings (what savings? The average Joe barely has any), then he should count his blessings. Under current policy, about 1 % of the average Joes are going to be dead within ten years, and even the ones who survive are going to get a one-way ticket to negative equity.

Savings are necessary to fund industrial production.

Loanable funds fallacy.

Wealth cannot be printed. Printing money destroys wealth.

[Citation needed]

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Mar 11th, 2013 at 03:37:18 PM EST
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