Protect Your Ass-ets, The March Toward Capital Controls is Quickening

A little while back I told you how what EstateOfDenial.Com calls IRA, Involuntary Redistribution of Assets, and which I call confiscation is taking place, as they were a little less subtle with me when they mailed me the confiscation letter which reminded me of Castro's Cuba in 1960 when my families assets were confiscated the first time.

For those of you not familiar with the 'Confiscation Letter' here is a link to it for your cultural enlightenment=>>Confiscation Letter

For those of you who think that when your parents assets were confiscated was due to an anomaly and because of a few bad apples within the system, and that some new legislature in the works will solve your problem so that it will not happen to you, I hate to be the bearer of bad news, but your assets are being confiscated right now as we speak.

Allow me to explain: last summer in June 2010 you could buy an ounce of silver for under $18 dollars today it would take $29.00 of your devalued dollars to buy that same ounce of silver, likewise it would take $8.63 to buy a bushel of wheat, roughly twice what it cost last summer, when I get letters like these from my highly regarded Capital Research Companies, it triggers alarms bells and I feel compelled to pass the warning on to those of you who will listen:

Dear Ray,

I've said before that the US Dollar was in BIG trouble... but as of
tonight, it's on DEFCON 1 RED ALERT TROUBLE.As the below chart shows, the greenback needs to rally and rally hard if we're not going to head into a SERIOUS collapse shortly.

What you're looking at is the US Dollar right on its multi-year trendline. If we take this out now, then we are heading into an inflationary death spiral in very short order.

Indeed, once we take out this line, we're just a few ticks away from triggering the MASSIVE Head and Shoulders pattern the greenback has formed over the last 20 years.

In case you're wondering, this pattern has an ultimate target of 40...
a full 50% lower than where the US Dollar is today.

We're talking about hyper-inflation on an order that would make
Weimar Germany proud. And if we break the green line above, we're THAT much closer to this becoming a reality.

As you can see, we're literally on the ledge of a cliff. Do not, I repeat DO NOT put off preparing for this now. I've long thought the US Dollar had one last rally in it, but looking at the charts
tonight I could very likely be wrong.

Indeed, inflation is already exploding worldwide, which means paper
money in general is going to be worth less and less on its way to worthless.

If you think the US is immune to this situation, you're in for a very RUDE
surprise in the coming months. Indeed, the Fed just announced it might even implement QE 3!!! And this came from one of its supposedly ANTI-QE members!?!?

Let's be blunt... the end game is fast approaching if not already here.Smart folks are already preparing their families and portfolios for what's to come, which is why I've recently published four reports designed to help folks cover all the bases in terms of protecting their loved ones,
savings, and portfolios for what's coming.

To find out more about Capital Research's work click here=>>Capital Research

Point being that even under normal circumstances "Inflation has now been institutionalized at a fairly constant 5 percent per year. This has been determined to be the optimum level for generating the most revenue without causing public alarm. A 5 percent devaluation applies, not only to the money earned this year, but to all that is left over from previous years. At the end of the first year, a dollar is worth 95 cents. At the end of the second year, the 95 cents is reduced again by 5 percent, leaving its worth at 90 cents, and so on. By the time a person has worked 20 years, the government will have confiscated 64 percent of every dollar he saved over those years. By the time he has worked 45 years, the hidden tax will be 90 percent. The government will take virtually everything a person saves over a lifetime."

Let me put it to you another way, Janet Phelan's mother had meant for the fruits of her sweat,blood and tears, a lifetime of savings, to be passed on to Janet as her lawful legacy before it was confiscated! Likewise Dr.A.J and Clara Fernandez also had a legacy to pass on to their heirs before it was confiscated, only myself having lived through prior confiscations (Communist Cuba 1959)I was able to wise up a lot quicker than a lot of you will and left the country before the totality of the Estate could be confiscated, others like Bonnie Reiter and too many to mention all here weren't so lucky.

However I have no doubt had I NOT stayed one step ahead of the guardians and dissolved my mother's trust and transferred the 'Trust' overseas where is now earning 40% annual interest , in order to be sure that my mother Clara now 94 is well taken care of! that there would be nothing left as the guardians was openly gunning for the 'Trust' after he exhausted all others liquid assets and allowed others like Real Estate to be lost by being auctioned off on their courthouse steps by the "Guardian" of my mother's assets, yeah what a joke, right! to be sold off by their failure to maintain and pay Real Estate Taxes on a timely basis... Real Estate Auction happens after three years of nonpayment of real estate taxes, my mother Guardianship battle lasted 5 years.

Ok, my point is this, had Janet Phelan's mother moved her assets overseas on a timely basis, (Before, she became incapacitated) do you have any doubt that Janet would be in complete control of her legacy, as it should be, out of reach from the greedy Guardianship Cartel that knows no bounds and knows of no decency and is inhumane to human suffering?Even going to the point of prematurely ending the elder's life after the money is gone? As documented here,here and here :

• The Probate Murders: Part Two
• The Probate Murders: Part Three
• Another Probate Murder?

For those who have already experienced asset confiscation , either subtly or not so subtly , those like Tom Fields whose legacy was subverted and opportunists struck while his father lay in bed on a morphine drip , See his Facebook Page=>>here

To those who have eyes to see and those who have ears to listen here is a letter from Simon Black that you will all do well to heed, if you wish to say NO Thanks and leave the lemmings pack before they jump off the cliff..........

-------------------------

Date: February 10, 2011
Reporting From: Santiago, Chile

In the late 1920s, the economy of the Weimar Republic was beset by numerous fiscal troubles. The global depression spread quickly to Germany, undermining the government's ability to make its reparation payments from the Great War.

Fearing a return to hyperinflation, many Germans who had spent the last decade building up a small fortune during the Weimar Republic's own 'Roaring 20s' decided to pack up and leave; they remembered the days when banknotes were used as wallpaper and had no desire to repeat the experience.

In 1931, Chancellor Heinrich Bruning imposed a 'flight tax', which levied a 25% tax on the value of all property and capital for Germans leaving the country.

Total revenue collected from this tax amounted to roughly 1 million Reichsmarks (RM) in its earliest days ($56 million today). By the late 1930s under Hitler's rule, flight tax revenue soared to RM 342 million ($21.5 billion today) as more people headed toward the exits.

This flight tax constitutes one of the earliest modern examples of capital controls. They've evolved substantially since the days of Hitler, but the end goal is the same-- governments controlling the flow of capital across borders.

Governments impose these for a variety of reasons-- rapidly developing nations may want to restrict the flow of capital into their country, preventing 'hot money' from pumping up prices and affecting local markets. We see this today in places like Brazil and Thailand.

In other instances, bankrupt governments seek to trap capital within their borders, maximizing the amount available for subsequent taxation or other forms of confiscation. This tactic is usually employed when lost confidence has impaired the government's capability to borrow.

We're seeing strong indications of both examples today, though the latter is the most alarming. As I scan the headlines and hear from colleagues in the US and Europe, it's clear to me that the march towards stricter capital controls is quickening its pace.

The British government, for example, just announced an increase to its bank levy that taxes UK-domiciled banks on their worldwide balance sheets. In response, HSBC has indicated that it may move its headquarters elsewhere.

I suspect the British government will enact legislation to discourage or prevent this from happening, likely with a modern day corporate flight tax (albeit with a more patriotic sounding name).

Capital controls can take a variety of other forms-- including taxation on outward remittances, restrictions on the movement of financial instruments, bureaucratic approval processes for foreign transactions, reporting requirements for foreign assets, and government control over banks.

This last is important-- when politicians and bankers are in bed with each other, banks can be compelled to loan a portion of their deposits to the treasury at unrealistic terms, sticking bank customers with sub-optimal yields below the rate of inflation.

In the US, I think retirement accounts will be the first to go. They're the easiest to grab because most people hold their retirement accounts domestically with a large financial institution that will happily sell every customer down the river when the government comes calling.

The way they'll do this is simple-- the next time there's a market meltdown (bear in mind that insiders are selling like crazy right now...), the government will step in with new legislation that requires these institutions to invest a portion of their accounts in the 'safety' of government securities.

Insider politiconomists like Teresa Ghilarducci have already strongly advocated for government managed retirement accounts in the US, and we've seen numerous examples of other bankrupt nations from Argentina to Hungary moving to seize their citizens' pensions.

The next step would be against retail bank accounts, specifically setting up provisions that discourage moving money overseas... and eventually restrict it altogether.

This would happen through new approval processes at the banking level, additional reporting requirements for foreign accounts, and disincentives for foreign banks to accept US customers.

Curiously, all of these have started to happen.

For example, while there are still a multitude of banks around the world who happily accept US customers, Americans are unwelcome at most foreign financial institutions thanks to continuous threats and pressure from the IRS. As one banker in Hong Kong told me recently, 'they are very scaaaaary'...

Also, the new HIRE Act legislation imposes additional reporting requirements and restrictions for foreign accounts that gradually phase in over the next two years.

This certainly jives with the timeline of the US government's ticking debt bomb; at a minimum, the market will require higher yields, and politicians will need cheap sources of capital to continue financing their waste.

I've said before-- it's imperative that everyone establish a foreign bank account, even with a small deposit. There are several banks like Caye Bank in Belize where you can open an account through the mail with just a nominal deposit.

This way, if you ever need to move the bulk of your funds in a hurry, you'll at least have the established infrastructure to do it.

For US taxpayers, I think the more immediate threat is to your retirement account. If you have an IRA, you can set up an Open Opportunity structure, take back control over your own savings, and be free to move your funds overseas.

(I think this is a no-brainer; you can read more about how to protect yourself with an Open Opportunity structure from my friend Terry Coxon's book Unleash your IRA, which he's now offering at a steep discount for Sovereign Man readers.)

Government playbooks are limited-- when confidence falters, new taxes fail to produce substantial revenue, and inflation causes a loss of popular support, capital controls are the answer. Problem is, we live in a world where legislation passed late at night can take immediate effect while we all sleep.

I know it's easy to kick the can down the road, but as the political and economic support for capital controls is spreading around the globe, I would urge you to take action immediately.



Until tomorrow,


Simon Black
Senior Editor, SovereignMan.com


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How Your Assets Are Being Confiscated/Devalued

"Inflation has now been institutionalized at a fairly constant 5 percent per year. This has been determined to be the optimum level for generating the most revenue without causing public alarm. A 5 percent devaluation applies, not only to the money earned this year, but to all that is left over from previous years. At the end of the first year, a dollar is worth 95 cents. At the end of the second year, the 95 cents is reduced again by 5 percent, leaving its worth at 90 cents, and so on. By the time a person has worked 20 years, the government will have confiscated 64 percent of every dollar he saved over those years. By the time he has worked 45 years, the hidden tax will be 90 percent. The government will take virtually everything a person saves over a lifetime."

And this is not factoring in the probate courts or guardianship program.......in case there is anything left over.....

Egypt: Preview of America in 2015

The rioting and looting currently taking place in Egypt is primarily a result of massive food inflation and shows what all major cities in the United States will likely look like come year 2015 due to the Federal Reserve's zero percent interest rates and quantitative easing to infinity. On December 16th, 2009, NIA named Time Magazine's 2009 'Person of the Year' Ben Bernanke our 'Villain of the Year', saying he created "unprecedented amounts of inflation in unprecedented ways" and "When it costs $20 for a gallon of milk in a few years, Americans will have nobody to thank more than Bernanke."

What started out a few weeks ago as protests in Algeria with citizens chanting "Bring Us Sugar!" and five citizens being killed, quickly spread to civil unrest in Tunisia which saw 14 more civilian deaths, and has now spread to riots in Egypt where 300 Egyptian citizens have been killed. Food inflation in Egypt has reached 20% and citizens in the nation already spend about 40% of their monthly expenditures on food. Americans for decades have been blessed with cheap food, spending only 13% of their expenditures on food, but this is about to change.

NIA was the first to predict the recent explosion in agricultural commodity prices in our October 30th, 2009, article entitled, "U.S. Inflation to Appear Next in Food and Agriculture", which said we have a "perfect storm for an explosion in agriculture prices". A couple of months later in 'NIA's Top 10 Predictions for 2010' we predicted "Major Food Shortages" and said, "Inventories of agricultural products are the lowest they have been in decades yet the prices of many agricultural commodities are down 70% to 80% from their all time highs adjusted for real inflation". Over the past year, agricultural commodities as a whole have outperformed almost every other type of asset, with silver being one of only a few other assets keeping pace with agriculture. (On December 11th, 2009, NIA declared silver the best investment for the next decade at $17.40 per ounce and it has so far risen 64% to its current price of $28.39 per ounce).

The world is at the beginning stages of an all out inflationary panic. Wheat, which NIA previously called on 'NIAnswers' its favorite investment besides gold and silver, is now up to a new 30-month high of $8.63 per bushel and has doubled in price since June of last year. Algeria bought 800,000 tonnes of wheat this past week, bringing their total purchases for the month of January up to 1.8 million tonnes, which was quadruple expectations. Saudi Arabia is also beginning to stockpile their inventories of wheat. Rice futures have gained 8% during the past few days with Bangladesh and Indonesia placing extraordinary large orders. Indonesia's latest rice order was quadruple its normal allotment and Bangladesh plans to double rice purchases this year. Meanwhile, the U.S., which is the world's third largest exporter of rice, is expected to cut production by 25% in 2011.

NIA considers rice to be one of the world's most undervalued agricultural commodities at its current price of $15.96 per 100 pounds and forecasts a move back to its 2008 high of $24 per 100 pounds as soon as the end of 2011. NIA believes cotton, at its current price of $1.80 per pound, may have gotten a bit ahead of itself in the short-term. In NIA's first ever article about agriculture on February 17th, 2009, we said that cotton's "upside potential is astronomical" at its then price of $0.44 per pound. NIA pointed to increasing sales to textile companies in China and the fact that cotton was down 70% from its all time high as reasons to be very bullish on cotton at $0.44 per pound. Early NIA members could have made 309% on cotton, but today we see much bigger potential in rice. The recent spike in cotton reminds us of the 2008 spike in oil. Although we believe cotton will ultimately rise above $3 per pound later this decade, we could possibly see a dip to below $1.40 per pound first.

Many people in the mainstream media have been criticizing NIA's recent food inflation report, claiming that agricultural commodity prices have very little to do with prices of food in the supermarket. CNBC's Steve Liesman, in particular, claims that "rising commodity prices won't cause inflation". Liesman has it backwards. NIA has never claimed that rising commodity prices cause inflation. Soaring budget deficits that the U.S. government can't possibly pay for through taxation causes inflation when the Fed is forced to monetize the debt by printing money.

Rising commodity prices are only a symptom of inflation. The reason NIA was so bullish on agricultural commodities going back two years ago when we produced our first documentary 'Hyperinflation Nation', is because while gold is the best gauge of inflation and is often the best tool for predicting future money printing, agriculture is where the majority of the monetary inflation ends up going after the Fed's newly printed money trickles down to the middle-class and poor. With gold prices already surging two years ago when we produced 'Hyperinflation Nation', NIA said in the documentary "food prices have the potential to surge most during hyperinflation".

One thing NIA is almost 100% sure of is that come year 2015, middle-class Americans will be spending at least 30% to 40% of their income on food, similar to Egyptians today. As NIA warned in its latest documentary 'End of Liberty', if you don't have enough money to accumulate physical gold and silver, it is important to begin establishing your own food storage, and store enough food to feed you and your family for at least six months during hyperinflation. Many store shelves in Egypt are now empty after recent panic buying, with shortages of nearly all major staple items throughout the country.

The U.S. Treasury is getting ready to sell $72 billion in new long-term bonds next week, as the U.S. rapidly approaches its $14.29 trillion debt limit. The debt limit is now expected to be reached by April 5th and Treasury Secretary Geithner warned the U.S. will see "catastrophic damage" if it isn't raised. With the Federal Reserve now surpassing China and Japan as the largest holder of U.S. treasuries, the real "catastrophic damage" ahead will be hyperinflation as a result of the U.S. government doing absolutely nothing to dramatically reduce spending. It is an absolute joke that Obama during his State of the Union address announced $400 billion in spending cuts over the next 10 years, but then the very next day, the Congressional Budget Office increased its 2011 budget deficit projection by $400 billion to $1.48 trillion.

Not raising the debt limit would be a good thing, as it would force Washington to live within its means. Sure, the stock market would collapse and the U.S. economy would enter into its next Great Depression, but at least it would save the U.S. dollar from losing all of its purchasing power. In fact, the standard of living for middle class Americans might actually improve if the government allowed the free market to put our economy into a depression, because goods and services would get cheaper.

The U.S. economy has become a drug addict that is dependent on cheap and easy money from the Federal Reserve. While Wall Street bankers took home a record $135 billion in total compensation in 2010, up 5.7% from $128 billion in 2009, this money was stolen from middle-class and poor Americans through inflation. The more monetary inflation (heroin) the Federal Reserve creates in order to satisfy the (in the words of Gerald Celente) "money junkies" on Wall Street, the more middle-class and poor Americans become dependent on unemployment checks and food stamps just to survive. Millions of American students are graduating college with hundreds of thousands of dollars in debt but no jobs. Luckily for them (but not holders of U.S. dollars), NIA is hearing reports from both unemployed and underemployed college graduates with student loans that the government is reducing their required monthly payments by sometimes 90% or more based on their current incomes.

China and Japan recently saw their credit ratings downgraded, while the U.S. credit rating remains at "AAA". NIA believes it would make far more sense for the world's largest debtor nation to be downgraded instead of the world's two largest creditor nations. The Federal Reserve's second round of quantitative easing has yet to even reach the halfway point and the Fed already holds about $1.11 trillion in U.S. treasuries. By the time QE2 is over at the end of June, the Fed will own $1.6 trillion in U.S. treasuries, about what China and Japan own combined. Shockingly, Kansas City Fed President Thomas Hoenig is already dropping hints about QE3. According to Hoenig, the Fed may consider extending treasury purchases beyond June 30th, 2010, (the scheduled completion date for QE2) if U.S. economic data looks disappointing.

With the Fed taking over as the largest holder of U.S. treasuries, China is beginning to rapidly move away from the U.S. dollar and into gold. In just the first 10 months of 2010, China imported 209 metric tons of gold compared to 45 metric tons in all of 2009, a stunning five-fold increase. While the western world is downplaying the threat of inflation as much as possible, Asian countries understand that hyperinflation is the most devastating thing that can possibly happen to any economy. The demand for gold in Asia right now is the most intense it has ever been, as they look to tackle rising inflation before it becomes hyperinflation.

The Chinese are so smart that families are now giving each other gold bullion as gifts instead of traditional red envelopes filled with cash. China is now on track to soon surpass India as the world's largest consumer of gold. The China Securities Regulatory Commission recently gave Beijing-based Lion Fund Management Co. approval to create a fund that will invest into foreign gold ETFs.

U.S. stock mutual funds saw $6.7 billion in net inflows during the past two weeks, the most in any two week period since May of 2009. The rioting, looting, and civil unrest in Egypt is now making the U.S. look like the safe haven of the world, even though it should be considered the riskiest place to invest. From the Dow's low in August until now, about $38 billion was actually removed from U.S. stock mutual funds, despite the stock market rising 20%. The Dow Jones has been rising from September until now solely due to the Federal Reserve printing around $350 billion out of thin air. When central banks print money, stock markets often act as a relief valve due to there being too much inflation going into the hands of financial institutions.

The U.S. M2 money supply surged by $46.6 billion during the week ending January 17th to a record $8.8623 trillion, following a rise during the previous week of $7.6 billion. The rise in the M2 money supply over the past two weeks of $54.2 billion equals an annualized increase of 16%. The M2 multiplier now stands at 4.218 compared to a long-term average of 10. When QE2 is complete, the Fed's monetary base will likely stand at $2.59 trillion. A return to the long-term average M2 multiplier of 10 means we are due to see a 192% increase in the M2 money supply and that is not even including a possible QE3 and QE4.

The U.S. economic ponzi scheme could unravel very quickly in the years ahead, with the velocity of money increasing much faster than anybody expects. As more Americans learn about NIA and become educated to the truth about the U.S. economy and inflation, a complete loss of confidence in the U.S. dollar could occur very suddenly. It is important for all Americans to prepare as if hyperinflation will be here tomorrow. At least in Egypt, their currency still has purchasing power and their citizens are trying to implement a regime change before it is too late. By 2015 in America, it will already be too late and the civil unrest here has the potential to be many times worse.

It is important to spread the word about NIA to as many people as possible, as quickly as possible, if you want America to survive hyperinflation. Please tell everybody you know to become members of NIA for free immediately at: http://inflation.us