Order Concerning Revaluation of the Thaler (GO-2013-02)

From MicrasWiki
Jump to navigationJump to search

WHEREAS the Crown Council has found that the experimental re-valuation of the Gotzborg Thaler undertaken in 2012 has been found to have generated unintended and undesirable side-effects on the effective administration of the Royal Government and free enterprise within the Royal Kingdom;

WHEREAS the Crown Council has affirmed that the Royal Kingdom is a proponent of a free market economy;

WHEREAS the Crown Council has deemed it necessary for the health and functionality of a free market economy that the experimental re-valuation of the Gotzborg Thaler be reversed and returned to near its pre-hiatus purchasing power as a core starting value for the renewed national economy;

THE ROYAL CHANCELLOR SO ORDERS as follows:

  1. Effective 2013-04-01, all existing Gotzborg Thalers in circulation shall be re-valued by a factor of 10;
  2. Those individuals and entities, including those of the Royal Government, holding a balance of Gotzborg Thalers in their possession shall be compensated by the Royal Bank of Commerce such that the balance held is adjusted to reflect the re-valuation. That is, for example, where a individual or entity holds 1 Gotzborg Thaler as of 2013-03-31, on 2013-04-01, the Royal Bank of Commerce shall provide the individual or entity an additional 9 Gotzborg Thalers such that their holdings are revalued by a factor of 10.
  3. The various ministries and agencies of the Royal Government shall take necessary measures to re-value specified fees and penalties, salary entitlements and other such amounts, to reflect the revaluation effective 2013-04-01.

Explanatory Notes

The Crown Council considered the question of the real value of the Gotzborg Thaler during its February 2013 meeting in response to concerns voiced by Council Members.

At the onset of the Royal Government's process to restart the national economy, the initial approach at determining the value of the Gotzborg Thaler was to use the cost of housing as the primary index key. The cost of housing was determined through assigning each Crown Servant salary grade to a specific type of housing (ex. middle-class) and then basing the cost of the housing on the Crown Servant being able to afford to purchase it after "X" months (generally 6 months) of salary accumulation.

This approach saw the Gotzborg Thaler issued in a lower quantity than in pre-hiatus years, with a higher unit purchasing power; however, the re-valued Gotzborg Thaler generated unintended difficulties. Many micronational enterprises base their price for a certain good on the equivalent value of that good macronationally, to reflect a widespread common understanding of value. With the low cost of housing resulting from a general requirement that a Gotzer be able to afford housing, reflective of the prestige of his Crown Service position, within a short period, the extrapolated cost of other goods was found to defy that common understanding of value. The Royal Government was therefore required to undertake an onerous task of setting allowable price ranges for a variety of goods already offered on the market and to take steps to ensure that the price of new goods would be similarly regulated.

The Crown Council was of the opinion that the difficulties caused by this approach to valuing the Gotzborg Thaler were counterproductive to the basic principles of free market economics that the Royal Kingdom advocates.

The Crown Council therefore implemented a change in approach to determining the value of the Gotzborg Thaler, by instead setting Crown Servant salary entitlement as the index point and allowing the free market conditions to dictate the price of goods to reflect the income of Gotzers. This approach was considered to be less onerous on Royal Government resources as well as providing less bureaucratic barriers to enterprises in their desire to set their own price for goods based on market conditions.

As a result of this change in fiscal policy, the Crown Council felt that it was prudent to re-value the Gotzborg Thaler to be more reflective of its pre-hiatus value, by increasing its current value by a factor of 10.

Per: Lord Montin Royal Chancellor

CONSOLIDATION NOTES Proclamation: 2013-03-31. Status: In-Force. Status Date: 2017-12-22