Sunday, September 7, 2014

Fed Employees Roll Out A Bold Idea To Trap The Entire Country’s Wealth

09.02.2014    BY KELLY BROWN

Free market economists are not going to be happy about this...
A major financial news source published shocking details about a research report by two employees at the Federal Reserve Bank. The 34-page report applauds the use of “capital controls” in global markets.
If you’re unfamiliar with the term “capital controls,” it’s probably because we tend to avoid them in the United States in favor of a free market economy.
Capital controls are simply laws that monitor and restrict what you are allowed to do with your money by regulating the flow of cash in and out of a national economy. The laws define such things as where you can invest your cash and how you can allocate your assets.
If you take a look around the globe, you’ll see several recent examples—almost always from countries experiencing a currency crisis:
  • In a result of last year’s crisis, citizens could not withdraw or write checks for more than €300 per day from their own accounts. A year later, Cypriots are still forbidden from traveling abroad with more 3,000 euros.
  • In controls imposed in 2008 have blockaded offshore investors from selling $7.2 billion in assets.
  • In Argentina...citizens must pay a 35% tax when they use their credit card on foreign vacations.
  • In the Ukraine...heightened tensions with Russia sparked a series of capital controls. Ukrainians were forced to wait six working days before making any type of foreign currency purchases. In addition, they could not exchange more than the equivalent of $5,800 USD within a given time period.
You might be wondering… how are these draconian laws a useful tool for managing financial stability as the recent Fed paper says?
Well, the Fed research claims that capital controls would protect the U.S. dollar from the effects of rapid cash movements...

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