Must Read: Fed Employees Rollout A Bold Idea To Trap The Entire Country’s Wealth
3.24.2014 BY KELLY BROWN
Free market economists are not going to be happy about this...
A major financial news source just published shocking details about a research report by two employees at the Federal Reserve Bank. The 36-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 regulate 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 example—almost always from countries experiencing a currency crisis:
In Cyprus...some citizens cannot withdraw or write checks for more than €300 per day from their own accounts. These controls were put in place after the Greek debt crisis of 2012 and are set to continue until year-end.
In Iceland...capital controls imposed in 2008 have blockaded offshore investors from selling $7.2 billion in assets.
In Argentina...citizens must pay an extra tax on vacations abroad.
In the Ukraine...recent tensions sparked a series of capital controls. Ukrainians must wait six working days before making any type of foreign currency purchases. In addition, they cannot 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...
Of course, the only countries that are worried about capital controls are those deeply worried about a currency crisis.
According to Steve Hanke, a professor of applied economics at Johns Hopkins University in Baltimore, “Capital controls signal that a country is very worried about preserving its foreign exchange....That means bad things are in the wind.”