Guest Post: This Is What Textbook Capital Controls Look Like
Submitted by Simon Black of Sovereign Man blog,
Selling snake oil and issuing unbacked paper currency are not so different. They're both wildly successful ploys for the guys pulling the strings. And they're both complete scams that depend solely on the confidence of a willing, ignorant public.
But once the confidence begins to erode, the fraud unravels very, very quickly, and the perpetrators resort to desperate measures in order to keep the party going.
In the case of fiat currency, governments in terminal decline resort to a very limited, highly predictable playbook in which they try to control... everything... imposing capital controls, exchange controls, wage controls, price controls, trade controls, border controls, and sometimes even people controls.
These tactics have been used since the ancient Sumerians. This time is not different.
Today, Argentina presents the most clear-cut example. Here the 'mafiocracy' unites organized crime, big business, and politicians to plunder wealth from Argentine citizens. Just since 2010, President Cristina Fernandez has--
* Nationalized private pensions, plundering the retirement savings of her people.
* Increased tax rates across the board-- income, VAT, import duties, etc. as well as imposed a new wealth tax.
* Inflated Argentina's money supply, printing currency with wanton abandon; M2 money supply has increased 215% in the past three years.
* Driven the value and purchasing power of the currency down by 50%. Street-level inflation is now 30%+ per year.
* Made a mockery of official statistics, comically understating the level of Argentine inflation and unemployment. She even began punishing economists for publishing private estimates of inflation that didn't jive with the government figures.
* Taken over control of one industry after another, most notably the nationalization of Spanish oil firm YPF's Argentine assets.
* Imposed export controls of agriculture products from beef to grains, forcing growers to sell at artificially lower domestic prices.
* Imposed capital controls, reducing her citizens' capability to dump their poorly performing currency and hold gold, dollars, euros, or anything else.
* Imposed a two month 'price freeze' on items in the supermarket, and encouraged retail consumers to rat out any grocer that doesn't abide by the government order.
* Imposed controls over the media, most recently ordered an advertising ban in Argentine newspapers (weakening their financial position).
Cristina's policies here are leading to shortages in everything from food to fuel to electricity. Hardly a month goes by without major strikes and disruptions to public services. The purchasing power of their currency is diminishing rapidly. And most people are completely trapped.
Of course, there were a handful of people who saw the writing on the wall. They learned the important lesson never to trust their government. They moved their savings to stable foreign banks. They purchased property abroad. They bought gold and silver, and stored it overseas. They were prepared when the plundering began.
The developed West is rapidly heading down this path. Europe is beginning to impose capital controls, and the IMF has sanctioned them. The US is rapidly printing its currency into oblivion, and confidence is eroding quickly. Russia just purchased an historic amount of gold, choosing real assets over more US dollar reserves.
It would be foolish to think the same things can't happen in the West. And even if it never happens, would you be any worse off for taking some of these basic steps?
(21 votes)
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but the Pope is pooped
and unlike the Central Banks, he knows when to quit pretending
He's giving up Pope for Lent.
he was going to give up meat, but that has less impact when you can't chew
Lemmy for Pope.
Pope Lemmy I:
http://tinyurl.com/anp43yp
http://tinyurl.com/aofkx2k
I'd become a Catholic!
Pladizow,
there's hope, my friend. Obama's got this!
...
Nevermind. What's that hotline's number?
USSArgentina
The Ace Of "Hades"
(pronunciation is important here)
Selling Snake Oil... EUREKA! Simon ~ You're finally living up to your potential in life...
~~~
I'm wondering though ~ Would you more recommend the Uruguayan 'snake oil'?... Or the snake oil from Gstaad?
I need MOAR bitcoin.
Excellent. + 2,347 (why 2,347?.........why not.)
Thanks for lighten us up Pladizow !
I just got depressed about that black simon operation going
on here, after his dubious coming out he gets even more moronic...
Very funny. I sent this to my friends ????
Including Altar Boy?
I've felt for a few years now that the best way to understand the USA's future is to look at Argentina's recent past.
as CD points out, it is now a federal offense to compare the US to any other people, country, economic, military or historical moment. If you do, they can search your hard drive without a warrant.
Holy Fuck.... F_S is screwed :)
The Kleptos are in a big hole
And soon will be taking control
Your money, your life
Your sexy young wife
That's just how The Kleptocrats role
The kleptos have come to pass
They already have your ass
Hide the kids and the wife
Keep a gun and a knife
That's a lesson for any young lass
I new a man called Simon Black
Who was undoubtedly hooked on crack
In each article he told
us to export our gold
but once gone it would never come back...........
I once knew a Limerick King
Who could rhyme just about anything
I tried hard to model
His impudent twaddle
But somehow my last lines always turned into crap.
I once tried to rhyme using 'orange'
But... But... But then I stopped & decided to do rap lyrics instead...
The gold price is starting to slack
reading ZH while continuing to stack
about some dude named droner
and bankers taking over
at least I'm not simon black
The wife they can have
she's been very bad
and the money's as worthless as poo is !!!
But.....but.....but that could NEVER happen in the good old USA.
Right?
/sarc
CD
Already happening.Try wiring any ammount overseas from a bank now.
What took two hours to arrive,now takes two days.
Nice new Treasury reporting form the banks have to fill out.
Seems the Govt. is also prepping.
Picture of Joseph Smith as a snake oil salesman?
Do I sense anti-mormon sentiment?
You beat me to it!
It would be kind of cool if WB7 would include some old Mormon clippings like this.
His Mitt Romney stuff is awesome. I don't like the garment/underwear pics though.
Your pic is awesome, BTW.
Nah, it's just that I wouldn't vote for anyone named "Willard".
Nothing more than the duplicated/ plagiarized religion of ancient 'Zoroastrianism `ism?-- when it comes to money, finance, elitism and hypocracy! http://www.wikipedia.org/wiki/Zoroastrianism
Looks like Alexander Hamilton to me........
They envy you for your harems.
It's all based on faith (aka not willing to accept facts) because "In God We Trust."
Fiat is never good. As the old saying goes, "It ain't worth a Continental."
They call it Fiat because it depreciates like a rusty Italian car.
Welcome to Duloc such a perfect town here we have some rules, let us lay them down;
Don't make waves, stay in line, and we'll get along fine, Duloc is a perfect place.
Keep your feet off the grass, shine your shoes, wipe your........face;
Duloc is, Duloc is, Duloc is a perfect place!
Well Duloc does look better than Idiocracy, I mean at least it was clean. Of course getting a "Hot Latte" any time you want seemed good at first, but being force fed Brawndo isn't much of a life.
On the other hand having the WWF Champion as president would be preferable to Obama.
Jesse Ventura for Pres!
Our current politicians are so ignorant, they can only make the same mistakes that have already been made. If you are not buying this dip in gold, you are nuts.
One month of QE shows up: http://research.stlouisfed.org/fred2/series/BASE How about the next 12?
THEY aren't ignorant! THEY know exactly what they are doing. THEY know that the PEOPLE are the stupid and will underestimate their cunning.
Maybe. But in the age of the internet, the biggest moron in America can become a currency collapse expert in an hour or two.
Its time to start the hangings in my opinion.
These fuckers need sorting out, and it will be left to us good folk to do so.
God damn fucking swines. And while I'm on, fuck you pope, and fuck you bernanke. I hope its me who pulls the chair away as you fucking swing you dwarf bastard.
I understand that it will happen the same way as in history with different background music. Distractions all around. Pope. Japan with China, Russia with Japan, North Korea on demand tests, Syria, Africa invasion, Iran playing chessgame. What else do we need. I feel hopeless, even those who can understand the root cases fall into apathy of not wanting to know more.
Argentina's course was set by Juan Peron in the 1950s. Among other things, he made voting mandatory. People who make no contribution, only take, are required to vote. Needless to say, they are careless in their voting. They sell their votes, and give them to politicians who pander to them. Since Peron there have been his widow Isabel Peron, a military government, and a succession of populist governments who have given it all away. They have had financial crises about every three years, severe ones about every twelve. Time is ripe for a severe one.
And now -- Eric Holder speaks of making voting mandatory in the United States. The disenfranchised will attempt to make themselves rich by stealing from the rich. It does not work that way. Wealth is the ability to make money, not the money itself. Even after they rob all the productive members of society blind, the plunderers will remain idiots. See Zimbabwe for a model.
There must remain some sane country in the world where people understand these fundamentals. New Zealand? Finland?
Not a place you seek, rather a time, probably after we are all dead.
I fear, before we were born.
nope, can't think of a single place. Iceland is about the best of the bunch.
I'm thinking you get 100 people together and take over an island in the Bahamas.
The Bahamas? Fine, if you're rich. Have you seen the price of broccoli down there?
I'm planning on invading and occupying Baja California, and forming a benign dictatorship where all shall love me and despair.