FATCA HR 2847 Capital Controls

Must Read: Fed Employees Rollout A Bold Idea To Trap The Entire Country’s Wealth by Kelly Brown 7/1/14

Free market economists are not going to be happy about this...

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.

If you’re unfamiliar with the term “capital controls,” it’s probably because we tend to avoid them in the United States in favor of a free market economy.

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.

If you take a look around the globe, you’ll see several recent examples—almost always from countries experiencing a currency crisis:

In Cyprus...some citizens cannot withdraw or write checks for more than €300 per day from their own accounts. These controls were put in place after the Greek debt crisis of 2012 and some are set to continue until year-end.

In Iceland...capital controls imposed in 2008 have blockaded offshore investors from selling $7.2 billion in assets.

In Argentina...citizens must pay an extra tax on vacations abroad.

In the Ukraine...recent tensions sparked a series of capital controls. Ukrainians must wait six working days before making any type of foreign currency purchases. In addition, they cannot exchange more than the equivalent of $5,800 USD within a given time period.

You might be wondering… how are these draconian laws “a useful tool for managing financial stability” as the recent Fed paper says?

Well, the Fed research claims that capital controls would protect the U.S. dollar from the effects of rapid cash movements...

Of course, the only countries that are worried about capital controls are those deeply worried about a currency crisis.

According to Steve Hanke, a professor of applied economics at Johns Hopkins University in Baltimore, “Capital controls signal that a country is very worried about preserving its foreign exchange....That means bad things are in the wind.”

For more than 50 years, Americans have never really thought twice about the value of our currency.

But times are rapidly changing. And most Americans don’t realize that the greatest weapon in our nation’s arsenal is not our military might or our education system, but the simple fact that the U.S. dollar is the world’s “reserve currency.” As such, our money forms the basis of the global financial system. And banks around the world hold our dollars in reserve against their loans.

That’s why, for the past few decades, we have been able to print and borrow trillions of dollars, with no real negative impact.

We are the only country in the world that does not have to pay for imports in a foreign currency. We can rack up enormous debts and then print more money.

But this exorbitant privilege could soon expire, because many of the most powerful countries around the world (including China and Russia) are looking for a new world reserve currency.

And when the U.S. dollar is no longer the world’s reserve currency… when we can no longer print money and borrow absurd sums without consequence– we are in trouble.

Source: http://www.wealthreporter.com/sa/fed-employees-trap-c.html?mvcode=212521

As noted on the American Citizens Abroad web site:

FATCA requires foreign financial institutions (FFI) of broad scope — banks, stock brokers, hedge funds, pension funds, insurance companies, trusts — to report directly to the IRS all clients' accounts owned by U.S. Citizens and U.S. persons (Green Card holders).

Starting July 1, 2014, FATCA will require FFIs to provide annual reports to the Internal Revenue Service (IRS) on the name and address of each U.S. client, as well as the largest account balance in the year and total debits and credits of any account owned by a U.S. person.

If an institution does not comply, the U.S. will impose a 30% withholding tax on all its transactions concerning U.S. securities, including the proceeds of sale of securities.

In addition, FATCA requires any foreign company not listed on a stock exchange or any foreign partnership which has 10% U.S. ownership to report to the IRS the names and tax I.D. number (TIN) of any U.S. owner.

FATCA also requires U.S. citizens and green card holders who have foreign financial assets in excess of $50,000 (higher for those who are bona-fide residents abroad) to complete a new Form 8938 to be filed with the 1040 tax return, starting with fiscal year 2011.

Source: http://www.snopes.com/politics/conspiracy/hr2847.asp

Comments

FATCA was passed in 2010 to take effect in 2014. It’s a desperate show of weakness and a symptom of federal fiscal malfeasance.  Voters should have never allowed the US to take its Debt from $10 trillion to $17 trillion.  Many declining countries have implemented similar currency-grasping laws. 

It’s not too late to mitigate the crash ahead.  It would require the federal government to cut spending in half, stop runaway immigration, drill everywhere, stop EPA clean air and water regulations and cut corporate taxes for manufacturing.

Norb Leahy, Dunwoody GA Tea Party Leader