-- Posted Sunday, 16 April 2006 | Digg This Article
Capital controls? What are those?
They are restrictive devices imposed by sovereign governments in collaboration with or under the direction of their respective central banks. For Americans it would mean our US Treasury would issue a declaration and the Federal Reserve would ensure compliance. Controls are designed to eliminate the outflow of capital (cash instruments) to outside the jurisdiction of the Federal Reserve. They are a time-worn device to prop up a failing currency and maintain the political ascendancy of the status quo.
In fact, we've gotten snippets of it here not too long ago with the freezing of assets of Iran, Iraq, and Libya whose deposits may have been in not only US banks, but those of foreign banks with US branches under the supervision of the Federal Reserve. Great Britain imposed them during the British pound crisis of the 1960s. Argentina slapped them on its citizens during their monetary crisis. Russia had them for decades during the Soviet regime as did other nations of the Soviet sphere. They can last for generations. If Cubans can ever cast off the chains of communism they can tell you about them. The Philippines have had them. Rhodesia (Zimbabwe) has had them, and still does. South Africa's had them, but now they have a two-tiered currency system - one currency for the home boys and one for the corporates and other elites. Red China has a two-tiered currency also, the yuan and the renminbi. 'Capital controls' is a euphemism for 'foreign exchange controls'.
Of course, in the case of the imposition of forex controls in the US we'll be told is for national security reasons, and to clamp down on terrorist financing. Foreign exchange "speculation" will be blamed for attacking the US dollar. Yeah, baby, we're all for fighting terrorism! Go get 'em Mr. President. Americans won't even recognize they're the intended victim of the control restrictions. US equity markets would take off like a rocket. In nominal dollars, however. Without M3 as a fever thermometer the Fed can get on with the business of monetizing (creating fiat) our debt. Long term rates would decline as investors have fewer avenues of investment alternatives. The Working Group on Financials and the Plunge Protection Team will be right there to assist and lend support and plug any cracks perceived in the US financial mortar.
But, we as Americans now live in an "interdependent" world now, don't ya know. A world to which we readily gave (not lent) our jobs along with gobs of fiats. We gave them a choice alright; take our fiats or suffer the alternative of our 6th Fleet diplomacy. Oh, don't worry Wal-Mart will still be there. Maybe with fewer items to select from, but in war we all must make sacrifices. Most parts for your Toyota will come thru although at horrendously higher prices. Haven't you heard of the worldwide shortage of upholstery fabric and transmission parts for heaven's sakes?
The message will be clear to many, but too late for most. Many Americans will go to their graves with wheelbarrows of paper currency, but not a drop of money. Casualties of war, I guess.
For those seeking refuge from an ever expanding government leviathan, the window is still open to get some of your savings out. When that window slams shut, it's too late.
I point you to consider a foreign account, a Swiss one, domiciled in Switzerland, a cantonal bank, and one without branches in the US. Avoid the large Swiss banks like the plague. Some are not particularly warm to Americans, but most are. I point you to this site, not as a business recommendation, but for their extensive FAQ on Swiss banking. Do your own homework. You don't need a paid intermediary knowing your personal business. Obey US reporting laws. Check with the IRS what this W9 form is all about.
There is no historical precedent for governments to ever restrict the repatriation of funds. You kidding, they want your money under their control!
Make a list of questions you want answered and call several banks directly. Your call will be answered in German - don't freak out - start talking in English and the lass will either switch to English or get someone who can converse with you.
If you're getting that fenced-in feeling with no place to hide this may be for you. This could be the best thing you ever did for yourself or your family. Just in case.
-- Posted Sunday, 16 April 2006 | Digg This Article
