INVESTMENT IN PRINCIPALITY OF SAN BERNARDINO

Investing in foreign countries is a relatively new option for individual investors. Luckily, the advent of internationally focused mutual funds and specialized bonds has made it easier than ever. The Principality is welcoming investment of all types: real estate development, infrastructure bonds, technology and innovation as well as immigration based investment for business and individuals.

THE CENTRAL BANK

The primary goal of central banks is to provide their countries' currencies with price stability by controlling inflation. A central bank also acts as the regulatory authority of a country's monetary policy and is the sole provider and printer of notes and coins in circulation. Time has proved that the central bank can best function in these capacities by remaining independent from government fiscal policy and therefore uninfluenced by the political concerns of any regime.

THE RISE OF THE CENTRAL BANK

Today the central bank is government owned but separate from the country's ministry of finance. Although the central bank is frequently termed the "government's bank" because it handles the buying and selling of government bonds and other instruments, political decisions should not influence central bank operations. Of course, the nature of the relationship between the central bank and the ruling regime varies from country to country and continues to evolve with time. To ensure the stability of a country's currency, the central bank should be the regulator and authority in the banking and monetary systems.

TRANSITIONAL ECONOMICS

Today developing economies are faced with issues such as the transition from managed to free market economies. The main concern is often controlling inflation. This can lead to the creation of an independent central bank but can take some time, given that many developing nations maintain control over their economies in an effort to retain control of their power. But government intervention, whether direct or indirect through fiscal policy, can stunt central bank development. Unfortunately, many developing nations are faced with civil disorder or war, which can force a government to divert funds away from the development of the economy as a whole. The Principality is not in that position today; nonetheless, one factor that seems to be confirmed is that, for a market economy to develop, a stable currency (whether achieved through a fixed or floating exchange rate) is needed. The central banks in both industrial and emerging economies are dynamic because of its stage of development.