Capital controls are measures to restrict the flow of capital. These restrictions can include taxes on financial transactions and regulations on the sale or purchase of equities, bonds, and precious metals. Controls can prevent or severly restrict cash withdrawals from banks (banks can close for extended time periods for so-called “bank holidays”).
Capital controls could prevent the liquidation of Exchange Traded Funds [ETFs] and mutual funds, or prevent you from selling U.S. Treasury Bonds and bond-related funds. Capital controls could require mandatory approval from authorities before money is spent on gold and silver. Or -as in 1933- gold/ silver purchases could be prohibited.
BANK HOLIDAY – DOLLAR DEVALUATION
The dollar was re-valued overnight in 1792, 1864, 1913, 1933, and 1971. The United States imposed capital controls in 1933. President Franklin D. Roosevelt declared a national emergency, closed the banks, and took control over silver and gold.
OVERNIGHT, THE U.S. DOLLAR WAS DEVALUED BY 69%
The United States was not at war. But on March 6, 1933, President Franklin Roosevelt used “war powers” [World War I Trading with the Enemy Act] to put an embargo on gold and close all U.S. banks. Overnight, the U.S. dollar was devalued by 69%. Before the “Emergency Banking Act” [March 9, 1933], the U.S. dollar was equivalent to 1/20th of an ounce of gold. After the Emergency Banking Act the dollar was equivalent to only 1/35th of an ounce of gold.
CAPITAL CONTROLS UNDER FASCISM
Adolf Hitler (Germany) and Benitio Mussolini (Italy) both outlawed individual ownership of gold. Both governments took total control of investments — including pensions. To finance massive public works projects and the military, citizens were forced to buy government bonds.
The following is an excerpt from a May 6, 1948 speech by Congressman Howard Buffett (father of Warren Buffet):
“[W]hen you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty….”*
THE ON-GOING, WORLDWIDE DEBT-CRISIS
On August 9, 2007, an unexpected “credit-event” triggered a chain reaction and global credit collapse. The entire financial system of the world FROZE. Since then, the following countries have imposed various forms of capital controls: Taiwan, Switzerland, Thailand, Portugal, Brazil, Iceland, Greece, Indonesia, Turkey, Peru, Russia, Ukraine, Italy, China, South Korea.
- In Cyprus, large percentages of people’s deposits were used to bail out banks; Cypriots’ remaining balances were paid back in forms of bank shares.
- Panama had an extended “bank holiday.”
- The State Bank of Vietnam banned gold bullion/ gold material from entering or leaving the country [effective May 15, 2014].
- India imposed harsh restrictions on gold purchases plus a 10% gold tax which forced gold smuggling.
- Spain, Poland, Argentina, and Ireland raided people’s private pensions.
Around the world, the incremental implementation of capital controls is a sign of the times (see the partial snapshot in the END NOTES).
It is now difficult for Americans to open foreign bank accounts. Exchange control laws are already in place in the U.S. to implement controls on investments, gold-ownership restrictions, border controls, global wealth taxes, and expropriation via bail-outs and bail-ins [EXECUTIVE ORDER 12472, EXECUTIVE ORDER 13603, EXECUTIVE ORDER 11858, DODD-FRANK].
YOUR DEPOSITS AND RETIREMENT FUNDS ARE NOT SAFE. The global economy is inter-dependent; and nothing has been ‘fixed’ since the world debt-crisis began. Loss of confidence in one major currency could trigger a worldwide melt-down in financial markets. The next time a “credit-event” causes financial markets to freeze, banks/ ATMs could close, bank accounts could be frozen, and bank assets could be seized.
Exchange PAPER for PHYSICAL silver coins
while it is still easy to buy 1 oz silver dollars.
MORE CAPITAL CONTROLS ARE COMING.
ONE WAY OR ANOTHER, YOUR SAVINGS WILL BE TAXED.
We believe significant capital controls will be imposed in 2018. But now is the time to diversify. Decide early where you want to put your capital. It will be too late to move in or out of investments [401K, IRA] at the first sign of big trouble. When sellers need liquidity, it will vanish. Overnight, most investors will be locked out of positions or locked in positions during the coming economic upheaval.
Submitted by Denise Rhyne
The following is just a snapshot:
- Feb. 2016 [Mrs. Yellen]: The Federal Reserve is “exploring” negative interest rates for the U.S. The European Central Bank [ECB] already charges people in the Euro Zone a penalty on savings deposits [negative interest rates were first proposed in 2014].
- Oct. 18, 2013: The International Monetary Fund [IMF] proposed a surprise, global wealth tax – a 10% tax on total household wealth, implemented around the globe before avoidance is possible.
- Feb. 12, 2014: The ECB Commission on Enforced Redistribution is ‘considering’ expropriation of a portion of bank deposits to fund long-term investments and EU infrastructure projects.
- Jan. 14, 2014: JPMorganChase changed cash deposit rules. Deposits may be made only into accounts that list your name/ ID is required.Dec. 22, 2013: Spending caps were imposed on 10% of debit cards.
- Oct. 16, 2013: Business Banking halted the use of international wire transfers and limited cash activity (branches, night drops, ATMs) in business accounts to only $50,000 per statement cycle.
- Jan. 24, 2014: HSBC restricted large cash withdrawals.
- Jan. 23, 2014: Harvard Professors Carmen Reinhart and Ken Rogoff called for capital controls similar to those in emerging markets
- Feb.16, 2014: Italy imposed automatic 20% deductions on all inbound money transfers.
- Jan.28, 2014: One of Russia’s biggest banks (Mohnbank) banned cash withdrawals.March 3, 2014 Ukraine UniCredit Bank limited ATM cash withdrawals.
- March 2, 2014: Ukraine’s largest bank, PrivatBank, limited cash withdrawals to about $100 per day.Jan. 26, 2014: ATMs were stopped/debit cards declined at major U. K. banks- Halifax, TSB, Lloyds (Lloyd’s Banking Group).
- April 2014: Bank Network Italy suspended all payments and announced a one-month bank holiday (authorized by the Bank of Italy).
- NOV. 16. 2016: CITIBANK is going cashless at some Australian branches.
- NOV. 8, 2016: WAR ON CASH INDIA. The Prime Minister is limiting ATM withdrawals and eliminated large bills [500 & 1,000 rupee denominations]; an ID card is required to return money to banks.
There are parallels between the U.S. economy [since 2008] and the economy of the German Weimar Republic [1920s]. Suddenly, lack of faith in the currency triggered ferocious money velocity. Hyper-velocity of money is a symptom, rather than the cause of credit-collapse. Credit FREEZES and currencies fail because of massive debt financed by the printing-press. Weimar: First DEFLATION Then INFLATION
“We Already Have HYPER-CREDIT:” http://www.washingtongoldexchange.com/