Welcome to Capital Controls

Capital Flight

Welcome to Capital Controls.

It is likely that capital has been moving out of this country since the Obama Administration revealed its true colors. Steps like these are taken by dying, desperate countries. As people start to emigrate (i.e., a “brain drain”), look for laws to prevent that.

Once a government enters a downward spiral like the US and opts for such blatantly unconstitutional acts, there is no telling where or how far it will go. Hopefully the election of 2010 will bring politicians to their senses. If not, it is likely stronger actions by the populace will be taken.

The excerpt below is from Zerohedge. For those interested, read the full article.

On March 18, with very little pomp and circumstance, president Obama passed the most recent stimulus act, the $17.5 billion Hiring Incentives to Restore Employment Act (H.R. 2487), brilliantly goalseeked by the administration’s millionaire cronies to abbreviate as HIRE. As it was merely the latest in an endless stream of acts destined to expand the government payroll to infinity, nobody cared about it, or actually read it. Because if anyone had read it, the act would have been known as the Capital Controls Act, as one of the lesser, but infinitely more important provisions on page 27, known as Offset Provisions – Subtitle A—Foreign Account Tax Compliance, institutes just that. In brief, the Provision requires that foreign banks not only withhold 30% of all outgoing capital flows (likely remitting the collection promptly back to the US Treasury) but also disclose the full details of non-exempt account-holders to the US and the IRS. And should this provision be deemed illegal by a given foreign nation’s domestic laws (think Switzerland), well the foreign financial institution is required to close the account. It’s the law. If you thought you could move your capital to the non-sequestration safety of non-US financial institutions, sorry you lose – the law now says so. Capital Controls are now here and are now fully enforced by the law.

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