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[Digital] Capital Controls

02 Feb

Digital Dollars [courtesy Google Images]

Hi-Speed Digital Dollars
[courtesy Google Images]

According to Wealth Reporter (“Fed Employees Roll Out Bold Idea To Trap The Entire Country’s Wealth”):

 

Capital controls are simply laws that regulate and restrict what you are allowed to do with your money by regulating the flow of cash in and out of a national economy. The laws define such things as where you can invest your cash and how you can allocate your assets.

“A major financial news source just published shocking details about a research report by two employees at the Federal Reserve Bank. The 36-page report applauds the use of ‘capital controls’ in global markets.”

 

Capital controls are intended to regulate or even prevent the flow of currency in or out of a nation’s economy.

So long as the international flow of paper currency is controllable, central banks (like the Federal Reserve) have two mechanisms for controlling their nation’s economy:

1) “Printing” more or less currency to increase or diminish the national money supply. When a central bank prints more currency, the national money supply is increased, causing inflation and economic “stimulation”.  When a central bank stops printing currency, it reduces the money supply.  That reduction tends to cause deflation and the economy is slowed.

2) Raising or lowering the interest rate. If a central bank dropped the national interest rate, the cost of borrowing diminished, more people were inclined to take out loans, the loans tended to spur economic activity.  On the other hand, if a central bank raised interest rates, less people borrowed and the economy tends to slow.

 

By applying both mechanisms at the same time, it was theoretically possible to “fine-tune” the economy to run faster or slower.

However, these two mechanisms both depend on the fact that the national money supply is essentially “trapped” within the national economy.  Without the central bank’s approval, not much foreign money can flow into a national economy; not much domestic money can flow out of the national economy.

Historically, capital controls weren’t particularly necessary so long as “capital” (dollars) was made of physical gold and silver.  The physical nature of our constitutional money trapped our dollars within the United States.  Physical masses of gold or silver could not be easily, quickly or safely moved from the US to Europe or Asia—if only because of the dangers of a ship bearing gold sinking in the Atlantic or Pacific oceans.

Therefore, when a central bank lowered interest rates in order to motivate people to borrow and spend more, gold and silver “capital” could not easily flee to foreign markets.  As a result, domestic lenders had little choice but to accept the low rates within the domestic market.

 

•  Today, however, our currency is largely digital and has no physical mass. Thanks to the internet, oceans are no longer sufficient to impede the flow of currency.  Digital dollars can move anywhere on the globe at speed of light.  Because creditors’ capital is no longer physical, it’s no longer “trapped” in any country or region.

Therefore, when a central bank lowers interest rates to spur inflation and stimulate the economy, domestic borrowing and spending, creditors instantly move their digital capital to other countries that pay higher rates interest.  By removing their capital to foreign countries that pay higher interest rates, creditors reduce the money supply in their own country and thereby foster deflation, recession and even depression.

Thus, the highly mobile nature of digital currency deprives central banks of their former power  to stimulate an economy by lowing interest rates and causing inflation.

Lowering interest rates may now be counter-productive and tend to slow, rather than accelerate, an economy.  By motivating domestic capital to flee from the domestic economy, lower interest rates diminish the domestic money supply—a definition of deflation—and thereby contribute to recession and/or depression.

Having lost their capacity change interest rates without also causing capital to flow in or out of a national economy, central banks have only one remaining mechanism to control the economy:  “printing” (or not printing) more digital or paper currency.  Digital currency has diminished the central banks’ power to control the economy.

Where formerly, central banks could control the economy by two means—adjusting the money supply by printing or not printing currency, and by changing interest rates—today’s central banks have only one means: by printing or not printing more fiat currency.

Today, if a central bank lowers interest rates to stimulate borrowing, capital simply flees over the internet to foreign countries that pay higher interest rates.  Net result?  Low interest rates (that might’ve had a positive effect if the currency was physical gold and silver that couldn’t flee the economy) may tend to reduce the nation’s digital currency supply and thereby foster deflation, recession and depression.

 

•  For central banks to regain their former power to control the economy by adjusting interest rates, they must find a way to both “trap” digital currency within local economies and prevent foreign currency from entering without central bank approval. But in an age of “Bitcoins,” who really believes that the movement of digital currencies can be controlled?

One way that modern central banks might regain their former power to control an economy by adjusting interest rate is to implement “capital controls” that prevent the free flow of digital capital from one national economy to another.  Therefore, it makes perfect sense that the Federal Reserve’s 36-page report (supra) would “applaud” the creation of more powerful “capital controls”

If effective capital controls can’t be implemented, central banks may have to admit that their only real remaining power over their national economies is to control the national money supply by printing or not printing more fiat cash.

 

•  Arguably, the past five or ten years of money printing by the Federal Reserve, Bank of Japan or European Central Bank may be evidence that the central banks’ only remaining economic control is the “printing” of currency.

Yes, in conjunction with printing more fiat currency under QE, central banks also lowered interest rates.  But what good did that do for their respective economies?  Japan has remained stalled in a depression for most of 20 years, even though their interest rate was virtually zero.  Even though trillions of dollars have been given by the Federal Reserve to major US banks, the US interest rates were so low that US banks were reluctant to lend to US borrowers (at low interest rates).  Instead, US banks tended to loan to “emerging markets” that paid high interest rates.  Result?  The US economy was only slightly stimulated by the trillions printed by the Federal Reserve but “emerging markets” enjoyed a three-year long, economic boom caused by the influx of freshly-printed US dollars.

Artificially low interest rates may be great for borrowers, but they’re terrible for creditors.  Therefore, whenever a modern central bank lowers domestic interest rates, creditors tend to move their digital currency over the internet to foreign countries paying higher interest rates.  Even though low interest rates should be great for borrowers, they’re not all that great since they also tend to shrink the supply of currency available to be loaned.

Sure, if you’re a borrower, a zero-percent interest rate is a fantastic deal.  But if the banks won’t lend money at that rate, what good does it do you?

Whether it’s even possible to install capital controls sufficient to restrict the flow of digital capital over the internet remains to be seen.  In fact, it might even be argued that modern “currency wars” between various fiat/digital currencies of the world may be an expression of a crude attempt at “capital controls”.

In any case, you can bet that the world’s central banks want digital capital controls in order to restore their former power control economies by adjusting interest rates.

But, unless and until those [digital] capital controls are established, it may well be that the biggest threat to the power of central banks to control national or even global economies is ability of private creditors to move their capital to foreign countries.

Why move your capital to foreign economies?

One primary reason:  In order to achieve some social engineering objective, the central bank in your country has done something sufficiently stupid to defy economic reality (like setting interest rates near zero) and thereby motivate domestic capital to flee to foreign countries that pay high rates of interest.

Faced with the probability of being robbed by inflation and/or zero interest rates, private creditors will move their capital to foreign countries.  Some will claim that these private financial moguls are unpatriotic when they export their capital.  But, what is anyone’s “patriot duty” to allow themselves to be robbed–even by their own government and/or central bank?

The truth may well be that the “greedy S.O.B.s” who move their currency to whichever economy pays the highest rates of interest may be doing the world a great service.  By moving their currency to the nations that pay the highest interest rates, the private speculators may be undermining and even destroying the central banks’ (and New World Order’s) capacity to rule individual nations and the globe.

If so, we can expect one or more of the following:

1)  The central banks will collapse;

2)  The central banks will fight for their survival by somehow devising capital controls that prevent private speculators from moving capital around the world;

3) Digital currency (which makes money movement almost impossible to stop) will be eliminated (that’s certainly unlikely)

4)  Private speculator access to digital currency (which makes money movement almost impossible to stop) will be eliminated or restricted to a maximum of, say, $10,000 per transaction or per day;

5)  Faced with what may be a mortal threat (private creditors moving their digital currency around the world), central banks may react by launching a crusade against private creditors which causes those private creditors to be vilified, charged criminally and imprisoned.

It might be argued that the primary purpose of “FATCA” (Foreign Account Tax Compliance Act of A.D. 2010) is to take a preliminary steps towards establishing capital controls relative to the US. Under FATCA, digital currency can’t easily leave the US or enter the US without being reported and subjected to taxes high enough to discourage the movement of capital.  FATCA hasn’t stopped the outflow of US currency, but it has restricted that outflow.  By establishing reporting requirements for capital that moves outside the US or is earned by “US persons” outside the US, FATCA lays the foundation for later capital controls.  First, the gov-co discovers where the capital is located and how much more capital is being earned.  Later, based on those reports, the government may establish genuine controls that prevent the movement of known capital kept outside the country.

One way or another, you’ll see capital controls in your future.  If there aren’t, you’ll see central banks fail.

 

 

 

 

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20 responses to “[Digital] Capital Controls

  1. russ

    February 2, 2015 at 12:51 PM

    FDA Attacks Man for Selling Supplement. This man is facing trial in 30 days for violating FDA. He needs to learn MOOA defense quickly.

    http://healthimpactnews.com/2015/fda-attacks-man-for-selling-supplement-that-has-healed-tens-of-thousands-facing-37-years-in-prison/

     
  2. Adask

    February 2, 2015 at 4:09 PM

    You could send him a link to my first article and copy of my freedom of religion defense at https://adask.wordpress.com/2008/06/17/man-or-other-animals-1/. The underlying concept won’t be easy to learn or even believe in 30 days, but it wouldn’t be impossible.

     
    • moon

      February 2, 2015 at 5:02 PM

      Just wondering if the trial could be rescheduled while this man comprehends MOOA. It may be worth a motion.

       
      • Toland

        February 2, 2015 at 10:39 PM

        You left out the “believe” part of Al’s comment. This belief also “won’t be easy” to accomplish in 30 days.

        Thus, the motion should be for more time so the defense can both comprehend and believe the MOOA defense.

         
  3. Fritz

    February 3, 2015 at 5:16 AM

    Toland,
    @ You left out the “believe” part of Al’s comment. This belief also “won’t be easy” to accomplish in 30 days

    IF Daniel’s heart is right with the Good LORD, & he gets the information about Man OR other ANIMALS, he will SEE IT INSTANTLY. It’s like, REVEALED. You will have to experience this to KNOW EXACTLY what I said IS TRUE !!!

     
  4. Roger

    February 3, 2015 at 5:22 PM

    As remarked by Al, “man or other animals” can take a while (over 30 days) to understand and believe. This happens in any situation where you’re trying to grasp something while you lack essential information. The difference between a clear picture and a deep mystery is often completeness of information.

    The key to unraveling this particular conundrum is found when you discover that the construction “man or other animals” is due to the legislature’s use of a legalistic, rather than colloquial, definition of “animal”.

    Of course, using the everyday definition of “animal”, which excludes man, the phrase “man or other animals is absurd nonsense like “man or other vegetables”. So the legislature that wrote “man or other animals” must have used a definition of “animal” that includes man.

    Once you understand this point, the verbal paradox is dispelled, you stop fiddling about, and useful knowledge of the MOOA legislature’s intent becomes possible.

     
    • Toland

      February 3, 2015 at 7:18 PM

      Roger,

      Another commenter here found a possible definition of “animal” that makes logical sense of the apparently meaningless “man or other animals” construct. 7 USC 136 defines “animal” to mean “all vertebrate and invertebrate species”.

      The word “vertebrate” of course means “having a spine”. And since man was created with a spine, man is obviously included under “animal” in this legalistic definition. (Maybe someone “spineless” could claim exemption to MOOA.) Whether this was the actual definition used by the “man or other animals” legislature is not yet known, but it appears a likely candidate.

      A key point is that, among the available definitions of “animal”, many have mutually inconsistent meanings. Thus man is not an “animal” under all definitions, but we already knew this.

      Another definition of “animal” that includes man is the original definition of this word – namely the meaning “animal” has from its origin in the Latin language. The Latin word “animalis” means “having breath”, which obviously describes man.

      An argument for “man or other animals” using the Latin root definition of “animal” is based on Genesis 2:7, where we read that God created man a living “nephesh” (in the original Hebrew text). This word “nephesh”, like the Latin word “animalis”, means a breathing creature.

      So, according to Genesis 2:7, God created man a breathing creature (“nephesh” in Hebrew) – that is, an “animalis” (the Latin root of “animal”), since “nephesh” and “animalis” have identical meanings.

       
      • Fritz

        February 3, 2015 at 7:52 PM

        Toland,
        @ (Maybe someone “spineless” could claim exemption to MOOA.)
        HAHHAHHAHhahahahHAHhahHahah. Hey, that’s GOOD, FUNNY TOO. D

         
      • Fritz

        February 3, 2015 at 8:24 PM

        Toland,
        @ An argument for “man or other animals” using the Latin root definition of “animal” is based on Genesis 2:7, where we read that God created man a living “nephesh” (in the original Hebrew text). This word “nephesh”, like the Latin word “animalis”, means a breathing creature

        An argument FOR?? For WHO? If YOU, Toland, are the accused, that, “FOR” argument is not “for” & in behalf of your stand. I see, that the “FOR” argument, is “for” your adversary to use against you. Of course, I think you already know this. Just my 2 cents woth for anyone who may not know.

         
  5. Fritz

    February 3, 2015 at 6:21 PM

    Greetings Roger,
    IF I understand what you are saying, & I believe I do, maybe what is showing below will be a good defense for YOU to use IF you are ever charged with violating a drug law

    “A law is considered void on its face if its meaning is so vague that persons of ordinary intelligence must guess at its meaning and may differ as to the statute’s application” (Connally v. General Construction Co., 269 U.S. 385, 46 S. Ct. 126, 70 L. Ed. 2d 322 [1926]).

     
    • Adask

      February 3, 2015 at 9:17 PM

      Is that you, Mikey?

       
      • Fritz

        February 14, 2015 at 9:03 AM

        I am ashamed of myself for not getting the picture/message/point earlier. I do now & In addition, since The big 3, Henry, Roger, &, Toland refuse to respond to my request, no need for me to stay any longer. Sides that, I don’t like to be spied upon. I have more than enough of that out here from those who are only trying to help me. And, NO, I am not paranoid about that. Did you by chance see the “Peave Officer” hiding behind that tree in the video submitted. They really do that. Honest Injuin. Anyway, be relieved. Bye bye.

        You can’t judge an apple by looking at a tree,
        You can’t judge honey by looking at the bee,
        You can’t judge a daughter by looking at the mother,
        You can’t judge a book by looking at the cover.

        Oh can’t you see,
        Oh you misjudge me,
        I may look like a farmer,
        But I’m a lover,
        You can’t judge a book by looking at the cover.

        Oh come on in closer Alfred,
        Hear what else I gotta say!
        You got your radio turned down too low,
        Turn it up!

        You can’t judge sugar by looking at the cane,
        You can’t judge a woman by looking at her man,
        You can’t judge a sister by looking at her brother,
        You can’t judge a book by looking at the cover.

        Oh can’t you see,
        Oh you misjudge me,
        I look like a farmer,
        But I’m a Lover,
        You can’t judge a book by looking at the cover.

        You can’t judge a fish by lookin’ in the pond,
        You can’t judge right from looking at the wrong,
        You can’t judge one by looking at the other,
        You can’t judge a book by looking at the cover.

        Oh can’t you see,
        Oh you misjudge me,
        I look like a farmer,
        But I’m a lover,
        You can’t judge a book by looking at the cover.

        Read more: Bo Diddley – You Can’t Judge A Book By It’s Cover Lyrics | MetroLyrics

         
  6. Fritz

    February 3, 2015 at 10:01 PM

    Where is the, “Thus saith the LORD”? Did you accidently leave out the c in, Mikey, e.g. Mickey? As in, Mickey Mouse? Do you think my comment to Roger was insulting? If so, I insulted myself in a prior thread using the same example & you said, Good information, Good opinion, Thanks. NOW, if you see my comments as Mickey Mouse comments, delete them. I was trying to be of help to Roger. I know Roger is the first one to see what the real & true purpose of your blog is because you said so. I did not mean to insult your boy.If you did not mean your question to be for me, disregard this message.

     
    • Adask

      February 3, 2015 at 10:32 PM

      No, I meant “Mikey” as in “Michael Phelps,” Les Fuchs, and “Legion”.

       
      • Fritz

        February 4, 2015 at 2:40 AM

        It’s not we the people, anymore,” it’s “we the animals”.

         
  7. Fritz

    February 3, 2015 at 11:50 PM

    Mark 8:27 Jesus and his disciples went on to the villages around Caesarea Philippi. On the way he asked them, “Who do people say I am?”

    28 They replied, “Some say John the Baptist; others say Elijah; and still others, one of the prophets.”

    29 “But what about you?” he asked. “Who do you say I am?”

    Peter answered, “You are the Messiah.”

    Alfred, I am, to you, whoever you say I am, that is, to you

    See also, Matthew 16:13

    I cut & pasted the following sometime back. However I forgot to include the name of the Poster.

    That showing below was sent to me by, John (Yochannan) William Notice, the, AL

    The Hebrew compound word Immanuel means = “with-us-is power” see the Hebrew compound

    word “H8034” above. Note: the name “AL” is Hebrew-Aramaic and means Powerful, Strong….NOT

    god, although a deity or a god is powerful, but so are mortal men in powerful positions. The

    word “god” is not a proper word here.

    Hebrew (read from right to left)

    Isa 7:14 לכןH3651 יתןH5414 אדניH136 הואH1931 לכם אותH226 הנהH2009 העלמהH5959 הרהH2030 וילדת

    H3205 בןH1121 וקראתH7121 שׁמוH8034 עמ-נ-ו אל׃H6005

    Translated by John (Yochannan) William

    Isa 7:14 So (“Therefore” is ok)H3651 the mighty oneH136 himselfH1931 will giveH5414 you a

    sign;H226 see H2009 a

    young womanH5959 will conceiveH2029 and bearH3205 a sonH1121 and callH7121 his

    nameH8034 with-us-is Al (with us is power).H6005

    My question to you, Al, IS, are YOU, this AL??

    Remember your answer? If you have to ask me, if I am “Legion” Legion means many. BUT, I think

    you are asking me if I am Legion, many meaning, many demons. My comments should answer that

    question, so I fail to understand why you ask. You should know the answer.

     
  8. dgn2200 fastwebnet.it

    February 10, 2015 at 1:27 AM

    I got this site from my buddy who informed me concerning this site and now this time I am visiting this web site and reading very informative posts at this place.

     
    • moon

      February 11, 2015 at 10:54 AM

      This site certainly has it’s moments! Keep reading.

       
      • Fritz

        February 11, 2015 at 8:20 PM

        moon, your e-mail address is invalid. What’s the latest info re:Your Court Case? Remember the “Traffic Ticket” thread on this blog?

        ROFLMYIAO < Thanks moon. D

         
  9. Fritz

    February 12, 2015 at 8:37 PM

    Roger, Henry, Toland, et.al., If you will, please explain the faults, flaws, etc. you see in, well, let’s call it the position/stand, etc., of, Alfred Adask in his presentation of MOOA in/to any Court, friend,or adversaryThanks !!!

     

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