On Capital Controls

Tyler Durden's picture

Submitted by Simon Black of Sovereign Man

It starts: the government’s plan to steal your money

There are consequences to being flat broke.

There are consequences to investing any level of confidence in a financial system underpinned by debt and the creation of paper currency.

There are consequences for ignoring reality and pretending that everything is normal.

This is one of them: European officials yesterday flat out admitted that they were discussing rolling out a series of harsh capital controls across the continent, including bank withdrawal limits and closing down Europe’s borderless Schengen area.

Some of these measures have already been implemented sporadically; customers of Italian bank BNI, for example, were all frozen out of their accounts starting May 31st upon the recommendation and approval of Italy’s bank regulator. No ATM withdrawls, no bill payments, nothing. Just locked out overnight.

In Greece, the government has taken to simply pulling funds directly out of its citizens’ bank accounts; anyone suspected of being a tax cheat (with a very loose interpretation in the sole discretion of the government) is being releived of their funds without so much as administrative notification.

It’s no wonder why, according to the Greek daily paper Kathimerini, over $125 million per day is fleeing the Greek banking system.

European political leaders aim to put a tourniquet on this wound in the worst possible way.

So what are capital controls?

Simply, capital controls are policies which restrict the free flow of capital into, out of, through, and within a nation’s borders. They can take a variety of forms, including:

- Setting a fixed amount for bank withdrawals, or suspending them altogether
- Forcing citizens or banks to hold government debt
- Curtailing or suspending international bank transfers
- Curtailing or suspending foreign exchange transactions
- Criminalizing the purchase and ownership of precious metals
- Fixing an official exchange rate and criminalizing market-based transactions

Establishing capital controls is one of the worst forms of theft that a government can impose. It traps people’s hard earned savings and their future income within a nation’s borders.

This trapped pool of capital allows the government to transfer wealth from the people to their own coffers through excessive taxation or rampant inflation… both of which soon follow.

The thing about capital controls is that they’re like airine baggage fees; ultimately, all governments want to do it, they’re just waiting on the first guy to impose them so that they can shrug their shoulders, stick it to the people, and blame ‘industry standards’.

Moreover, capital controls were a normal part of the global economic landscape for most of the 20th century, right up to the 1970s. It’s been a long time coming for governments to return to that model.

Since the inception of this letter, it has been a constant theme for us to talk about the increasing threat of capital controls. Your money, your savings, your livelihood are all under attack by insolvent governments, and it’s critical to take steps to reduce your exposure.

When European financial leaders all openly admit that they’re making plans to establish continent-wide capital controls, it really begs the question– what additional warning sign does one need?

The dominos have already started falling. Iceland. Ireland. Greece. Spain. Portugal. Italy. Cyprus. Soon even France and the rest of Europe. And it will come to the United States as well. There are over 15 trillion reasons why.

So what are the most critical steps to take now?

1) Buy precious metals and store in a secure jurisdiction.

Holding gold and silver overseas is a great way to (a) ensure your savings is protected against inflation, and (b) ensure that your precious metals cannot be confiscated in the event that gold ownership is criminalized in your home country.

I strongly recommend Singapore, Hong Kong, and Abu Dhabi as three potential safe jurisdictions for your gold and silver.

2) Open a foreign bank account.

For funds that need to be maintained within the financial system (as opposed to precious metals), make sure you have a safe home for your money abroad in a safe, well-capitalized bank.

3) Have a place to go overseas

Economic turmoil brought on by governments stealing people’s savings generally goes not bode well for social stability. If things get hairy, you’ll want to have a place to wait it out. And you don’t want to be deciding on the location while you’re packing your bags.

As an example, I’ve picked up an 1100-acre farm in central Chile that won’t skip a beat when the financial system implodes. The sovereign debt bubble does not affect whether or not my trees will bear fruit or my vegetables will grow.

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Mr Lennon Hendrix's picture

Your Central Planners know best.

Move along....

Leopold B. Scotch's picture

You, Sir, are advocating economic terrorism.

Get used to that phrase. Notice how the officials making the statement were clear that this would not be done for economic reasons, but rather for national security and citizen safety reasons.

You know... You gold bugs are terrorizing currencies = our national security. You're either with us, or you're against us.

Pladizow's picture

"Money power denounces, as public enemies, all who question its methods or throw light upon its crimes." - Jennings Bryan

The ultimate capital control will be to turn your imbedded chip off.

AnAnonymous's picture

Your Central Planners know best.

Move along....

They have built 'America'

Tirpitz's picture

They've built America - stacking card on card... And now the wind is freshing up.

tocointhephrase's picture


kindape's picture

i think you will eventually see a different type of 'capital controls'.  I suspect that futures trading of things like oil and corn will be limited to producers and real hedgers (e.g airlines or food processors).  And currency trading will be restricted to those who actually take delivery of the currency. This is in the cards. It will certainly dampen liquidity but will also (in the long run) dampen the pure 'finance' side of our economies. Look for at least a partial start to these rules within a year

walküre's picture

That would hurt the pigmen. Don't see that happening.

They Tried to Steal My Gold's picture

Or instead of confiscating gold - they put a 50% tax on any sales other than to the government. You should also consider which countries will basically collude and extradite financial information. If the US is doing this, you can bet assure they'll have all of the EU doing the same at the same time. 

Stoploss's picture

Wait until the ATM's get ripped out of the walls.. LOL!!

Good luck with the cap controls!

Winston Churchill's picture

Would not suggest that.

Made the original prototypes for NCR.

If you get it out of the wall,the cash incinerates as a failsafe.

XitSam's picture

Proof? I've seen news reports over the years of ATM wall yanking and none of them said anything about incineration.

Winston Churchill's picture

I think they modified it later on to;

out the wall and opened.

The ones I worked on were the very first ATM's back in the 70's.

That had a mercury switch.

I'm sure the feature is still in there.The bank just returns the metal

strips in the money to the CB and gets refunded.See what happens if

you try it.

Ratscam's picture

nowadays they use ink that soakes the paper to make it almost illegible.
Good luck paying with them.

XitSam's picture

Dye packs probably make more sense. thanks for replying to all

Bringin It's picture


Lot's of people talkin this down.  What's up with that?  Maybe the banks want a monopoly on robbing?

GeneMarchbanks's picture

The sovereign debt bubble does not affect whether or not my trees will bear fruit or my vegetables will grow.

That is correct. Just make sure you stockpile cucumbers as high as the sky. Also, do not under any circumstance share it with the government nor the locals, for it is the American way.

1) Steal underpants

2) ?

3) Profit

Excellent stuff.

Matt's picture

OT - how can you confirm if a stock is in the HFT Tractor beam?

ZNGA is moving sideways with higher than average volume, with movements of $0.01 at a time it seems.

Where do you get 25 ms stock charts from?

Possible Impact's picture

Where do you get 25 ms stock charts from?



follow   https://twitter.com/#!/BadAlgo  for fun HFT algo news



iDealMeat's picture

Can't up tick you PI..  so, +1 thx..

newsguy68's picture

Yes the govt is going to steal our money. hell they are going to limit how much you can withdrawl in the eu soon.


Tirpitz's picture

Indentured servants shouldn't feel any need to own money.

ruffian's picture

Hold PM's outside your home country...........easier said than done

Yea, I feel safe with my gold 5000 miles away

Ruffian says........keep your PM's close !!!


Jack Sheet's picture

Yeah as a citizen of Dog Breath, Michigan, I've just flown to Singapore and back to deposit my 5 Eagles outside USG jurisDICKtion

Thomas's picture

Yup. My metals are within reach on short notice. I am sure I can find a way to move them across a border if I have to.

johnQpublic's picture

might need a couple just to bribe those border guards

Gief Gold Plox's picture

The first line from that link reads: "Deciding to buy physical gold or silver is a no-brainer."

I believe the author just called most of the people I know, or ever met for that matter, brainless. How could he have known?

SilverTree's picture


Always take delivery! !! Fuck, just take delivery!! If you can't hold it you don't own it!!

tocointhephrase's picture


Gringo Viejo's picture

...and your enemies closer, huh?

Sudden Debt's picture

Send them to me! I'll give you a paper that says they're yours!

TheGardener's picture

I agree with you ruffian, Simon Black sounds like Karl Marx,
good analysis but wrong conclusions and horrible calls for action. Save jurisdictions, foreign bank accounts, odd city states that years ago announced full cooperation with OECD
demands on so called money laundering... so much 90`s and
a parody of what to do now : back to your tribe and make
sure everything and everyone dear is close.

lolmao500's picture

It's coming everywhere.

The Big Ching-aso's picture



WTF, Black.  Yeah sure so many of us can PU an 1100-acre farm in Chile for shitsake like it's buying a donut 2 ride this out.

ArkansasAngie's picture

I live in Arkansas

Does Oklahoma qualify as a foreign territory?

Thank God for Mississippi ... eh?

johnQpublic's picture

shit, arkansas damn near qualifies as a foreign country itself

FullFaithAndCretin's picture

Yeah Simon, tell us where your farm is and we'll all move in with you when the shit hits the fan. 1100 acres, you'll hardly know we are there.

Uncle Remus's picture

Can you get a double-wide in Chile?

percolator's picture

Well at least until the Chilean Gov't confiscates it.

BlueCollaredOne's picture

Black likes to frequently remind us in his posts that he is more well off than us.  He is the guy who tweets "Fuck, I crashed my Range Rover so Im stuck driving the Mercedes to the golf course today."

It most likely boils down to an issue with penis size.



akak's picture

Well, you know, once you go Black you never go back.

Uber Vandal's picture

Perhaps Black is the inspiration for the "Most interesting man in the world" Dos Equis beer commercials.

At museums, he’s allowed to touch the art. . . .  Sharks have a week dedicated to him. . . . He once had an awkward moment, just to see how it feels. . . . The police often question him, just because they find him interesting. . . . . His small talk has altered foreign policy. . . . Even his enemies list him as their emergency contact

Jonas Parker's picture

Seizing PMs in the US might be a problem... at least in Texas.

LoneStarHog's picture

"Seizing PMs in the US might be a problem... at least in Texas."


Seizing PMs in the US will be a problem... especially in Texas.