The modern tax state, characterized by centralized, unilateral taxation, is a recent institution that emerged in feudal Europe and is not rooted in antiquity.
In the tax state, the central government has the power to directly impose and collect taxes and to raise them unilaterally without veto from other institutions, marking a shift from earlier systems.
In medieval Europe, rulers derived revenue from personal estates, customary tributes, and dues paid by vassals, with taxation viewed skeptically as a regular funding method.
The ideal medieval prince functioned as an armed judge and arbiter, with revenues intended to support the royal household and provide surplus for emergencies, rather than funding commonwealth expenditures.
The rise of absolutism in the 16th century, characterized by centralized power and regularized taxation, marked a significant transition to the modern tax state, differing from earlier systems focused on private property and contractual revenue collection.
The modern tax state emerged during the late medieval to early Renaissance period, with the ideal prince’s role evolving from supporting the royal household to managing broader state responsibilities.
Dollarization in Argentina would eliminate the central bank, stopping capital flight and boosting the economy by ensuring debt remains domestically managed.
With 75% capital flight due to the peso, dollarization is presented as a solution to Argentina’s debt servicing crisis, aiming to retain investment and stabilize the economy.
Dollarization in Argentina, fully backed by gross reserves, could stop capital flight, stabilize expectations, and eliminate banking, balance of payments, and currency crises, as argued by Professor Steve Hanke.
To implement dollarization, Argentina should freeze the monetary base for 30 days, allow the currency to float, and convert pesos to dollars at a fair exchange rate determined during this period.
The orthodox currency board model, which crushed hyperinflation in 1991, is considered a necessary alternative to prevent monetary discretion from destabilizing the economy again.
Dollarization could serve as an economic boost and a model for other Latin American countries like Panama, Ecuador, and El Salvador, enhancing U.S. influence in the region.
A stabilized Argentina through dollarization would lead to higher growth rates, tighter fiscal discipline, and reduce regular debt defaults and crises, linking the economy to the U.S. Federal Reserve.
The International Monetary Fund opposes dollarization, advocating for each country to maintain its currency and central bank, whereas the U.S. strategic interest might support dollarization in the region.
Mike Maloney predicts a global financial crisis within a year, with stocks, bonds, and real estate in historic bubbles and gold signaling the need to prepare.
Central banks are still buying gold, indicating it hasn’t peaked due to physical demand in Asia and India.
The gold-silver ratio at 85:1 suggests silver’s massive upside as it aims to reach a 20:1 ratio or less.
Maloney expects silver to outperform gold, potentially reaching a 20:1 ratio, with gold remaining stable.
A major wealth transfer is occurring from West to East, with Asia buying and the West selling, as discussed in Maloney’s book, “The Great Gold and Silver Rush of the 21st Century.”
The dollar has lost over 99% of its value since the Federal Reserve took charge, being worth less than 1/4,000th of an ounce of gold.
Major banks like JP Morgan are recommending up to 20% gold in portfolios, indicating a shift to the final phase of the gold bull market.
Elliott wave analysis projects gold could reach $9,000-$10,000/oz, being 3.1 times longer than the 1970s bull market.
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