21st Century Wire
March 31, 2010
Americans’*ability to move*their money across international borders may become restricted thanks to new legislation passed last week. Buried within Obama’s recent $17.5 billion “H.I.R.E.” Hiring Incentives to Restore Employment Act (H.R. 2487)*is a new U.S. Federal restriction on any foreign holdings which exceed the meager amount of $50,000 and leaves the door open for a new*30% transaction or ‘holdings’*tax to*be enforced by the IRS.*The new law*amounts to*an*unprecedented extension of the US Government into the global sphere.
Why has the*White House and its Federal Government decided passed such a law now? We should start*by considering the big picture. The ramifications of this*new under-the-radar federal move are large and far-reaching. Concerned readers would do well here to question both the fundamental and practical*aspects of such a law.*Consider for one moment the letter of the law- or the figure of $50,000. For extremely high net-worth individuals, this new regulation over their personal freedom*amounts to a mere ’speed-bump’ in financial terms. With their money buried securely into property, foreign*investments and strings of shell companies and complexed funds, financial elites will find this new super socialist state control affects only minor liquid cash amounts, or ‘pocket-money’. For the middle class or small investor, the picture is quite different. Fast-forward 12 or 18 months into the future where rising inflation and a severe devaluation of the dollar may occur. The ability for a middle class American to migrate his or her savings into the relative safe haven of a foreign*currency or*overseas*investment is now controlled by the United States Federal Government.*
Economists and historians will note that such “Capital Controls” are part and parcel of super-socialist states like the Soviet Union and its former satellite*states. Even today, it’s common practice for struggling socialist governments located in regions like South America, Central America and Africa to impose periodic restrictions on cash leaving those countries- a sure sign of a currency and economy in decline. This practice also characterizes*foreign states who are under the economic restructuring administration of the International Monetary Fund (IMF). One could also speculate that such restrictions imposed on Americans would*certainly pave the way for a*future IMF-type administration of the USA, making it markedly easier to manage*for the World Bank.
Putting all speculation aside though, this new law amounts to a dangerous precedent where the Federal Government can, with the full*enforcement of the IRS,*lay down*Capital Controls on any dollar amount- regardless of its size. In the event of a US currency devaluation(see US ‘Bank Holiday’)*of the dollar, the said figure in the new bill-*$50,000, could become*a rather nominal sum amounting to only 2/3’s or 1/3 of it’s previous value. Do not count on the Federal Government to adjust its printed figure of “$50,000