Ministry of Economics : Issuing money.
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by Central Bank of Latvia
Current proposal of "Issue money" is approved by government.
(Sorry for the delay. A bit of RL and some problems to take care of.)
Today a big amount of LVL was bought on monetary market by some unknown players. More than 20.000 LvL
Good news : we have some gold for Hospital and MPPs.
Bad news : again we suffer from economic manipulations.
CBoL actions :
1. CBoL continues to keep value of LVL on 0.006 Gold.
If anyone of Latvian players (congressmen who donated 5 gold) will wish to buy LVL for 0.006, could do so directly from CBoL (via Donate). However, buyer is expected not to use this money for trading on monetary market.
2. We proposed "issue money" Law and Donate.
It will not remove the deficit of currency completely, but hopefully will help us in this situation. Anyway, we can repeat this as many times as we need to enforce our decisions.
3. Gold will be kept for a time.
We do not know what are the intentions of buyers. Before spending it we would like to ensure stability.
red-fox
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It's good to see some more light is being shed on the current plan to protect LVL. 🙂
Where did you learn your economics, Mr. Bank Administrator?
Oh. Someone wishes to enlighten us.
If we raise value of LVL we will have UNSTABLE currency.
We tried to make it in the first month. It did not work. Ok? No theory. Pure practice.
We cannot have 30% of value fluctuations every two days. Even if some foreign speculants like it.
If we will raise value of LVL we will APPROVE with our citizens wealth of thiefs from Indonesia and current speculants who bought out our reserves and sent monetary market into chaos.
Therefore : all benevolent and economically enlightened beings with loads of LVL can go somewhere else with their offers to raise value of LVL.
It's impossible to control the exchange rate when you have a limited amount of currency. When it's depleted, you have to stop and print more currency.
Let's say you start with 100K LVL
If you intend to sell it at 0.006g/LVL that's 600 gold
With 600 gold you can print 120K LVL
The 120K LVL can be bought by speculants with 720 gold.
On the other hand, if you sell it at 0.015 g / LVL that's 1500 gold.
With 1500 gold you can print 300K LVL.
300k LVL can be bought by speculants with 4500 gold.
What do you think? Is it easier to destabilize the market with 4500 gold or with 720 gold?
drewxyz
You are ignorant of situation in Latvia. Market is destabilized with LVL not Gold.
Your Gold-based calcualtion may mean anything, only if there weren't 60k LVL stolen by Indonesia. Add them and your "0.018 simpler to control" means : "we are ready to give our gold away!".
Central Bank does not have monopoly on LVL.
Indos wish to SELL the money. And sell they will, whatever we do. If LVL value is high - we have much more trouble than if the value is low.
> It's impossible to control the exchange rate when you have a limited amount of currency. When it's depleted, you have to stop and print more currency.
That means, we effectively have UNLIMITED amount of currency. Also : getting Gold when low LVL is being destabilized, instead of losing it to keep LVL stable when the value is high, looks good to me.