For those of you who have been thinking about seeking protection for your wealth and assets outside of the United States, your time is running out. Though it does not directly control the amount of money an investor can send out of the United States, a new law passed by Congress earlier this month makes it much more difficult for you to move your money out of US dollar based assets:
It couldn’t have happened to a nicer country. 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 Aâ€”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.
Over the last several decades, government policy has shifted to controlling every aspect of Americans’ lives. What better way to do this then with your time, energy and labor, and thus your money?
As Zero Hedge points out, they’re not done yet:
And so the noose on capital mobility tightens, as very soon the only option US citizens have when it comes to investing their money, will be in government mandated retirement annuities, which will likely be the next step in the capital control escalation, which will culminate with every single free dollar required to be reinvested into the US, likely in the form of purchasing US Treasury emissions such as Treasuries, TIPS and other worthless pieces of paper.
Congratulations bankrupt America – you are now one step closer to a thoroughly non-free market.
This is just the beginning. At some point in the near future, when the US dollar comes under serious international pressure and foreigners and Americans alike start offloading what is essentially worthless toilet paper, the federal government will likely make it illegal to move money out of the US completely.
The alarm for serious investors is sounding and it is likely that they will begin to move as many assets off of US shores as possible before it’s too late. Capital flight is a direct effect of the growing restrictions on private property rights. The long-term ramifications will be a lack of desire from foreign investors to move any investment dollars into the US.
Once again, a brilliant economic move by the US Congress and President.