IMF Proposed Ten percent “Debt Tax” on Net Assets

IMF10 Percent Debt Tax

Dear PGM Capital, Blog readers,
In this weekend blog article we want to discuss with you IMF, “Fiscal Monitor Report” of October 13 2013, entitled “Taxing Time

In the above mentioned report, the International Monetary Fund elaborates on a general “debt tax” on the net asset of each household in indebted countries.

In this vignette, the IMF stated that due to the high public debt in many countries there is a renewed interest in indebted countries for introducing a special tax on private capital of their citizens.

According to the French newspaper Le Figaro, the IMF by discussing this special tax in its latetest “Fiscal Monitor Report” indirectly suggesting this measure.

It is worth mentioning that “Le Figaro” is known for its good relations with IMF President Christine Lagarde.

Ms. Christine Lagarde IMF President

The IMF is not a debating club. It is the engine of many changes in the world economic system. It has influence, which means that the fact that the IMF is raising this balloon, is more than enough reason for people to be very worried.

The IMF is going even further, by making a calculation for this (eventual) special tax. In order to reduce the debt of the indebted countries to the level, before the outbreak of the financial crisis in 2007, a crisis tax of 10 percent on the net assets of all household is needed.

On top of this the IMF Fiscal Monitor, suggests that the top tax rate for High Income countries with a debt to GDP over 80 percent, be increased up to 70 percent.

In accordance with the IMF, this concept of a one-time crisis tax on capital isn’t new. It is a proven recipe that has been applied several times before, such as in Europe after the First World War in Germany and Japan after World War II.

Here below our readers will find a video in which the IMF explains the content of its “Fiscal Monitor Report” entitled “Taxing Time”


PGM Capital comments:
During the last 3 years we have continuously been sounding the alarm, that chances are that the current debt crisis – the worst debt crisis since WWI and WWII -, combined with a FIAT currency system, will ultimately lead to a collapse of the current world monetary system combined with a massive expropriation of assets.

With the current development, savers, should be very worried and  on a high-alert readiness.

Chances are that this one-time crisis tax will be Accompanied by a massive and widespread expropriation and control of capital movements and that governments of indebted countries will try to cut off escapes routes and close holes in the tax-system of their countries.

Below chart shows that yesterday October 25th, 2013, the total world debt was 51.8 Trillion US-Dollars.

World Debt Clock

Based on a projection of IMF, OECD and World-Bank the world GDP will grow this year with approx. 3 percent, bringing the world GDP for 2013 around 73.5 Trillion USD-Dollars.

A simple calculation shows that based on the above data, the debt to GDP ratio of the world currently is approx. 70 percent, the highest it has ever been.

In fact, the current indebted countries are check-mate!

If their governments do not get their debt under control, they risk default or there is a chance that – via massive money printing – those countries will create a runaway hyper-inflation in order to dilute their debts and due to this bring their debt-to-GDP ratio to a reasonable level.

According to the IMF inflation can also be considered a (hidden) wealth tax, which will erode savings, dilute bonds and destroy pensions.

This means that planet earth is in a very serious debt situation, which if not resolved soon, may lead to social unrest, financial armageddon or even WWW-III.

Madam Lagarde as, the president and spokesperson of the international financial  literally said in an interview,

Someone has to pay for the party

The remarkable thing about this concept is that the IMF does not say that a tax should be levied in order to stimulate the economy. Or to invest in education. Or to provide companies with the opportunity to employ more staff. Or to promote innovation.

In the current indebted world, investors and savers should know the difference between money and currency and realize that politicians will try to dilute the value of their currencies and consequently reduce the debt to GDP ratio of their country.

As senator Ron Paul PhD, once said:

We would go further, however, and argue that gold could be characterized as “good” money, as opposed to “bad” money, which would be represented by many of today’s fiat currencies.

In describing gold as such we refer to Gresham’s Law: when a government overvalues one type of money and undervalues another, the undervalued money (good) will leave the country or disappear from circulation into hoards, while the overvalued money (bad) will flood into circulation.

We believe that the smart money should be allocated in “Portable Hard-Assets” (good money) registered under a name of a vehicle and stored in a safe country, with a proven history of secrecy and asset protection

History has proven that Gold, Silver, Platinum, Palladium and Diamonds are ideal “Portable Assets” and storage of value vehicles.

As a service to our readers we have included below a table containing the top 10 of world’s safest countries for your money and investments, updated July 1st 2013, in accordance with “Euromoney Country Risk”

Country risk rankings Q2 2013 The least-risky countries for investment
Rank Previous quarter Country Overall score
1 1 Norway 89.70
2 2 Switzerland 87.44
3 3 Luxembourg 87.21
4 4 Singapore 86.59
5 5 Sweden 86.41
6 6 Finland 84.54
7 7 Denmark 82.49
8 8 Canada 82.45
9 11 Hong Kong 81.74
10 10 Australia 81.53
Score out of 100.Source: Euromoney Country Risk – published July 2013


Last but not least we advise our readers to take good note of this statement of the IMF:

We are confident that the global “debt tax” can be successfully implemented.

However, we strongly believe that populistic politicians may prefer to keep on kicking the can down the road and will try to blow away their debt via money printing and blame this on third parties or countries. In the end, the effect of this scenario will be more painful for their populations, because inflation is like the ‘Jeannie in the bottle’: once it is out of the bottle you cannot predict how big it will become and will be very difficult to get it back under control.

For the sake of humanity we hope that common sense, even of populistic politicians, will prevail above their hunger for staying in power and subsequently blaming  others for their mistakes.

Until next time

Eric Panneflek

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