Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Misguided Case for Capital Controls

Politics / Credit Crisis 2013 Apr 25, 2013 - 01:29 PM GMT

By: Casey_Research

Politics

By International Man, Network

New York Times columnist Paul Krugman recently penned an article in which he comes out in favor of capital controls.

Not surprisingly, his argument follows the near cookie-cutter justification used by governments throughout history to seize more control over their citizens.


  1. Spuriously shift the blame for the crisis onto foreigners.
  1. Claim the increase in government control is for "your own good."

Krugman doesn't see irresponsible government spending and the resulting debt as the core cause of recent crises in Europe and around the world. Instead, he blames inflows of money by undefined foreigners.

He even says that the US is victimized by inflows of foreign money when he claims, "It's not just Europe. In the last decade America, too, experienced a huge housing bubble fed by foreign money."

According to Krugman, it's not the fault of the Federal Reserve's artificially low interest rates for blowing up the housing bubble, nor the profligate spending habits of European welfare states for causing the debt crisis, but rather those vague, evil "foreigners" who are to blame. And we need government actions (i.e., capital controls) to protect us.

Nixon followed this pattern, too, when he infamously severed the last link of the dollar to gold on August 15, 1971, thereby removing any limit on the government's ability to finance itself by debasing the currency and stealthily confiscating the wealth of savers through inflation.

In the years preceding this announcement, the US government financed its out-of-control spending – which stemmed from the Vietnam War and new welfare programs – by printing more dollars than it had gold backing for.

Nixon claimed he was removing the last links of the gold standard because it was "in everybody's best interest" and that he was protecting us from foreigners, i.e., "international speculators." He also claimed that he was taking further action to "increase jobs for Americans." Watch his two-minute sales pitch below.

It is not a stretch of the imagination to think that another president could take similar measures and then sell it to the American people the same way Nixon did.

I view it as a near certainty that the US government will impose some form of capital controls and wealth confiscation when the US dollar loses its spot as the world's premier reserve currency. It will be the next "August 15, 1971" moment.

Selling such measures to the majority of the American people will probably be an easy task. Paul Krugman is already on board, and the rest of the mainstream media functions more like a bunch of government stenographers than an independent press.

It would be wise not to underestimate their ability to take something that is abjectly false and convince the American people that it's true.

Take, for example, the role the media played in helping to convince a whopping 70% of Americans of the falsehood that Saddam Hussein was personally responsible for the 9/11 attacks.

There should be no doubt that when the US government decides to implement capital controls or other restrictive measures, it will likely have the near-total support of the media and by extension the majority of the people (AKA "the mob").

The moment there is another August 15, 1971-style event is the moment the window closes for Americans. Nobody knows exactly when that will happen, but it appears to get closer each week. You want to be internationalized before that happens. Capital controls is not the only thing you need to worry about if all your assets are within your home country's borders. There are rising taxes to consider… government asset seizures… creeping inflation… the list of threats is long and getting longer. To help you diversify your assets, Casey Research has produced a critically important investors' web event, Internationalizing Your Assets, which premiers Tuesday, April 30 at 2 p.m. Eastern. Tune in to this free video and discover a multitude of legal ways to move your wealth abroad from Doug Casey, Peter Schiff, and other acclaimed experts on international diversification. Click here for details and to register.

© 2013 Copyright Casey Research - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Casey Research Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in