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FSN: Hedging Against Capital Controls: Opening an Account Overseas
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
by Charles Hugh Smith
Of Two Minds
As financial insecurity and instability rise, hedging becomes increasingly important as a means of capital preservation. One potential hedge is diversifying one’s liquid capital by holding some cash in a “safe haven” foreign bank account.
Two signs that fear and instability have reached critical mass are capital flight and capital controls. Capital flight is people and enterprises moving their capital (cash and liquid assets) to an overseas “safe haven” to avoid devaluation of the currency or confiscation of their capital/assets. (Devaluation can be seen as one method of confiscation; high taxes are another.)
Capital controls are the Central State’s way of stemming the flood of cash leaving the country. Why do they want to stop money leaving? If we think of each Central State as a neofeudal fiefdom, we understand the motivation: citizens are in effect serfs who serve the State and its financial nobility. If the serfs move their capital out of the fiefdom, it is no longer available as collateral for the banks and a source of revenue for the State.
Continue Reading at OfTwoMinds.com…
2012-09-10 00:19:21
Source: http://silveristhenew.com/2012/09/09/hedging-against-capital-controls-opening-an-account-overseas/
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