Simon Black

There are consequences to being flat broke. There are consequences to investing any level of confidence in a financial system underpinned by debt and the creation of paper currency. There are consequences for ignoring reality and pretending that everything is normal.

This is one of them: European officials have flat-out admitted that they were discussing rolling out a series of harsh capital controls across the continent, including bank withdrawal limits and closing down Europe’s borderless Schengen area.

Some of these measures have already been implemented sporadically; customers of Italian bank BNI, for example, were all frozen out of their accounts starting May 31st, upon the recommendation and approval of Italy’s bank regulator. No ATM withdrawals, no bill payments, nothing. Just locked out overnight.

In Greece, the government has taken to simply pulling funds directly out of its citizens’ bank accounts; anyone suspected of being a tax cheat (with a very loose interpretation in the sole discretion of the government) is being relieved of their funds without so much as administrative notification. It’s no wonder why, according to the Greek daily paper Kathimerini, over $125 million per day is fleeing the Greek banking system. European political leaders aim to put a tourniquet on this wound in the worst possible way.

So what are capital controls?

Simply, capital controls are policies that restrict the free flow of capital into, out of, through, and within a nation’s borders. They can take a variety of forms, including:

— Setting a fixed amount for bank withdrawals, or suspending them altogether
— Forcing citizens or banks to hold government debt
— Curtailing or suspending international bank transfers
— Curtailing or suspending foreign exchange transactions
— Criminalizing the purchase and ownership of precious metals
— Fixing an official exchange rate and criminalizing market-based transactions

Establishing capital controls is one of the worst forms of theft that a government can impose. It traps people’s hard-earned savings and their future income within a nation’s borders.

This trapped pool of capital allows the government to transfer wealth from the people to their own coffers through excessive taxation or rampant inflation… both of which soon follow.

The thing about capital controls is that they’re like airline baggage fees; ultimately, all governments want to do it, they’re just waiting on the first guy to impose them so that they can shrug their shoulders, stick it to the people, and blame ‘industry standards’.

Moreover, capital controls were a normal part of the global economic landscape for most of the 20th century, right up to the 1970s. It’s been a long time coming for governments to return to that model.

Since the inception of The Sovereign Man, it has been a constant theme for us to talk about the increasing threat of capital controls. Your money, your savings, your livelihood are all under attack by insolvent governments, and it’s critical to take steps to reduce your exposure.

When European financial leaders all openly admit that they’re making plans to establish continent-wide capital controls, it really begs the question — what additional warning sign does one need?

The dominos have already started falling. Iceland. Ireland. Greece. Spain. Portugal. Italy. Cyprus. Soon even France and the rest of Europe. And it will come to the United States as well. There are over 15 trillion reasons why.

So what are the most critical steps to take now?

1) Buy precious metals and store in a secure jurisdiction.
Holding gold and silver overseas is a great way to (a) ensure your savings is protected against inflation, and (b) ensure that your precious metals cannot be confiscated in the event that gold ownership is criminalized in your home country. I strongly recommend Singapore, Hong Kong, and Abu Dhabi as three potential safe jurisdictions for your gold and silver.

2) Open a foreign bank account.
For funds that need to be maintained within the financial system (as opposed to precious metals), make sure you have a safe home for your money abroad in a safe, well-capitalized bank.

3) Have a place to go overseas.
Economic turmoil brought on by governments stealing people’s savings generally does not bode well for social stability. If things get hairy, you’ll want to have a place to wait it out. And you don’t want to be deciding on the location while you’re packing your bags.

As an example, I’ve picked up an 1,100-acre farm in central Chile that won’t skip a beat when the financial system implodes. The sovereign debt bubble does not affect whether or not my trees will bear fruit or my vegetables will grow.


Simon Black
for The Daily Reckoning

Simon Black

Simon Black is an international investor, entrepreneur, permanent traveler, and free man.

  • gman

    they’re only stealing back what the infestors stole in the first place.

    “I’ve picked up an 1,100-acre farm in central Chile that won’t skip a beat when the financial system implodes.”

    good luck on finding anything to buy in the middle of nowhere after a financial collapse.

  • Nandan

    You are taking every thing in a simplistic way. Buying land in a foreign country is not free from hazards as property ownership is not guaranteed. Governments under pressure to demonstrate their commitment to poor by confiscating land from rich and distributing to poor.e.g. Many African states, Fiji etc. Even in India land control act, all land above 50 acres is taken over by Govt for redistribution.

  • hide and lose

    Wonder how it went for those that put their precious metals in Germany, Italy, France, or Japan just before WWII attempting to hide them from Roosevelt.

  • Josh

    Simon makes good points. I think this is excellent advice for those who do not wish to face what is coming in America. I have made the decision to prepare and will fight to keep things together in my small town. Like many veterans, I am not going to let this country collapse without a fight. There must be people left who can rebuild. My ancestor signed the Declaration of Independence. How can I face him in the afterlife if I run to South America when the going gets rough?

  • chowthen

    Josh, you’re the only one with the right idea. Why would you want to run when the going gets tough? I’d rather fight to keep what’s mine.

  • CT

    Rats always leave a sinking ship and who can blame them.

  • al b

    The sovereign debt bubble does not affect whether or not my trees will bear fruit or my vegetables will grow.

    Well, you better hope the “fit doesn’t hit the shan” to the point where the Chilean gubmint takes notes from the Argentines and decides that you as a Gringo don’t get to keep as much of that land as you hoped and your land is declared necessary for gubmint use and you’re SOL.

    Good luck on your farm up to that point. I’ll take up life in Punta Arenas and fishing, forgoing the wait for something to sprout on trees or come up from the ground.

  • Michael

    Having some precious metals sounds like good advice, but why in another country? Surely if things get as desperate as some think, with an entire financial system collapse, the foreign government or bank will just help themselves to your gold and silver? What’s going to stop them? You, holding a piece of paper claiming ownership of some chunk of metal 8,000km away? Why would anyone care as they clean out the vaults?

  • Starving Steve

    So long as Bernanke keeps interest rates at zero and banks refuse to lend, inflation is going to zero and cash is getting scarce. Gold, oil, real estate, everything are going to go ( or continue to go ) down. And war in the Middle East is nothing new; it’s part of the culture of the Middle East, so war is already built into the price for oil. And one more thing, Bernanke is faking everyone out by advocating/advertising inflation and secretly ( quietly) draining the U.S. economy of liquidity. So long as he keeps interest rates at zero, cash is scarce and becoming scarcer because the rate (the speed) of circulation liquidity is now approaching zero. Banks and everyone else are hoarding cash because the future is so cloudy and uncertain.

  • Starving Steve

    Notice how the dollar is getting stronger in the forex, energy and the gold market. That gives the whole story away right there. This is a de-flation.

    Notice the beautiful homes that you can now buy in California— and for peanuts. This is unprecedented.

    Where’s the income? Where’s the jobs? How will people retire? That gives the whole story away right there. And all you will hear/see on television is the Fed printing money. Again, Bernanke has faked-out everyone.

  • Starving Steve

    The next shock will be the total collapse of the idiotic green energy movement. The world will quickly go back to hydro-electricity, atomic power, clean coal, and natural gas. That will drive electricity prices down to almost zero. That fact alone will put downward pressure on oil and the entire cost of living.

    This should have been done decades ago. Not one dime should have gone for funding/subsidising green power.

  • JT

    Steve is living on another planet. As someone who works in nuke power, you’ll not see prices drop a dime. In fact, they will go up, even as the companies get more subsidies from the government, if they can. Our infrastructure is falling apart, most of it is quite old and in need of replacement. While I am not a fan of “green energy”, every other power source is just as heavily subsidized, sorry to say.

    As for cheap real estate in CA, where, pray tell? I’ve been looking for investment opportunities, and despite large amounts of empty homes, most areas simply haven’t dropped much in the past couple years, unless you want to live in “California Valley”, or some other failed real estate scam development.

  • michael cardoni

    Josh, totally agree with your post.. fight for what is mine..
    Michael Cardoni

  • Lyndee

    Josh has it right, fight for our country!hopefully there will be enough of us.

  • DoesNotMatter

    All you jokers who talk about fighting. Why have you not started already? What are you waiting for? The stars need to be aligned in the right position? or are you planning to start fighting when you find yourself in a concentration camp. Bunch of loud-mouthed pikers is what you are.

  • Jimmy

    have been listening ti your special report on the bottom… it has gone past a couple of hours…. how long more to go ?
    i have fallen asleep twice throughout it… i cannot understand how you can put out shut a long video report… do you really believe that anyone has listened to it completely ???!!!

  • Didymos

    submitting to the most hight El Yahweh Yashua Ruach Kodesh is our only solution salaam noteph

  • XPhysics/CG

    You can’t eat gold. IF the collapse ( been hearing this… stuff, for going on 40 years now) comes we will be reduced to semi organized mobs of desperate armed scavengers who will destroy anything between them and what they believe they’re entitled to. So if you’re getting metals get lead, copper jacketed, stockpile toilet paper and beer… then you have something valuable to barter, IF you’re lucky enough to be in a barter situation, and a means of protecting yourself; at least from a couple of scavengers, IF you have the skill and the will.

  • http://msn R. MERRITT


  • Chin

    Scary, shall we all pull our money out and stash it in a safe place? We need to do something, these financial institutions can’t make it if WE all pull out, they will collapse!

  • Chin

    We the PEOPLE control, think about it, there are more of us than them!

  • AlvieC

    Mr. Investor,

    I don’t think you have the whole enchilada. Do you not realize that the (Central Bank) Federal Reserve here in the Good ole US of A uses the collateral from the countries you provided as a domino affect? Do you realize your investments, which are payment intangibles from worthless transferable records have no value? You only think you have money my friend. I suppose when the real truth about LIBOR comes out, I hope you have enough beer to cry in as that’s about all the fortune you have. Folks there is a 600 Trillion FUBAR across the globe and there is nothing that will stop it. Look around, it is revealing itself now and I suppose before this year is up, the banksters and it’s Krony buddies in Congress will have fled the country by then as they know you will not be happy with what the’ve done with your pension plans and 401k’s that you are planning on for retirement. Our wonderful people in the government have utterly destroyed our country along with others and continue to force the American people to support them. Talk about a bunch of deadbeats, they have milked America dry with their greed and taxes. I hope you know how to ruff it? I hope you know other languages as you may need them to explain that you did not approve of what our politician did, yet media(TV) lets the world see you supporting them. Google Trillion Dollar FUBAR and learn more.

  • Henry Murten

    Good Luck in Chile, Simon. You’re going to need it: lots of it. I did research many years ago on terrorism and secret police around the world. Chile had and may still have a vast secret police organization trained and supplied by the West. In the book that I read it even stated that the secret police in Chile have dogs trained to rape people. That should give you something to think about, eh, Simon. Cheers.

  • TerryZ

    I read this post and also some of the comments. The first thought that comes to mind is; who cares? The failed banking system is there because of us, those of us here in America. I blame all of you. I blame the American people (which I am one) for not paying attention year after year. Only 30% of Americans vote. If we all voted then none of this would have happen at all. Shame on you. Now go back to your Lady GaGa video and shut up.

  • AmericanPatriot

    FIGHT – III%

  • Boomer

    im not broke i got 35 cents in my pocket from the obama change in america. wake up america.67 yrs old to tired to fight anymore

  • 2dum2wank

    This entire page is a SCAM, “Simon Black” has no qualifying education, is homeless and has a “Black” line across his eyes! The whole thing’s a hoax to scare you into a subscription and these posts are bogus too.

  • 0ldcodger

    Federal Reserve is not legal read the constatution

  • Peter

    If I were you people I’d dust off my bible and start reading. You might want to start in Matthew 24. The Great Tribulation. Keep your eyes on Jerusalem people. When Jerusalem is surrounded by armies the end is near. When the false prophet stands in the Holy Place where he ought not (Abomination of Desolation) and cause an images to speak….this will signal the start of 3.5 yrs of the Great Tribulation. Your money will not save you. Nothing like it since the beginning of mankind will eclipise it. We need to get right spiritually….NOW.

  • Peter

    One other thing……there will be no rapture…there is no such thing to be found in the Bible. Just like all the other protestant doctrines..i.e., immortal soul, everburning hell, christmas, easter the rapture is a false doctrine. Go to your bible and believe the WORD of GOD.

  • ted

    lol – peter – no hell, immortal soul or rapture? you need a new Bible buddy.

  • Realistic

    Wow, what a collection of end-is-coming tin-foil-hat-wearing nutcases. All of you, not just the religious kooks. Go find a cave somewhere (or mom’s basement again) to hole up in and stfu.

  • Dudley Gunston

    I’m a Military and world Historian, I’ve studied the rise and fall of world governments since Rome. I studied the economic events since Rome. What I would like to point out to everyone is this. The Aristocrats became land owners and then central bankers. They ruled Europe for 1500 yrs, some sank on the Titanic, this group of people own 90% of all the central banks that print money. They created the central banks that print the Euro, Dollar, and over 80% of the worlds currencies, they make money no matter what happens, deflation, inflation, wars, depressions, recessions, it doesn’t matter to them “they are so wealthy that I have estimated their worth at well over 250 Billion to 1 Trillion. They pay NO TAXES and they don’t own small banks, they own the BIG BANK, the one that supplies the other banks, they lend the banks money at 4% or whatever they want to charge.. Natural inflation occurs no matter what happens, when they lower the interest rates to zero. They actually take your money when they do this, because inflation occurs no matter what, they loan the money to banks at a zero rate – because of this it creates a currency war… They actually still make 4% no matter what happens! Have you ever wondered who owns the federal reserve? Try to find the owners and you can’t. They could care less if the world starts another war, they make even more money, none of their children will fight or die in the mess… This is the group that you want to find! Quit looking at the simple and look for the hard to find, hunt them down and then show them to the world! Because they are thieves, murderers and could care less if you or your family dies! Try to locate these people and see what you find? NOTHING, they own everything and yet nothing is on paper… Its all in GOLD, DIAMONDS, SILVER… I have spent ten years trying to locate these people, haven’t found one yet. The Federal Reserve has never been audited… During Clinton’s presidency he had someone on his staff who brought up the Federal Reserve, Clinton said “do not even go there, leave that alone and never talk about it again, do you understand what I am saying” and the man said “yes sir.” They spent 300 years rigging the system, they meet once a year and go over what they want to do with the economies of the world… Like this “let’s create another depression and suck all the money from everyone’s bank account, we will then reset the debts of all the nations back to zero and start over again.” They vote on it, and when they say okay let’s do it… They crash the system by creating FIAT MONEY and they dump it all into circulation destroying everyone’s wealth except theirs “they actually seize your money and your land.” They want to return to the old days when we where all pheasants living on THEIR LANDS. Look up the word Pheasant and you will see that really, they were all slaves to the land owners!

  • spelunker

    “The Primary Owners of the Federal Reserve Bank Are:

    1. Rothschild’s of London and Berlin

    2. Lazard Brothers of Paris

    3. Israel Moses Seaf of Italy

    4. Kuhn, Loeb & Co. of Germany and New York

    5. Warburg & Company of Hamburg, Germany

    6. Lehman Brothers of New York

    7. Goldman, Sachs of New York

    8. Rockefeller Brothers of New York

  • Rotten Rooster 54

    Have you ever read the story of “Blood Diamonds”? Diamonds are a bad investment, the value is manipulated by the De Beers family monopoly on pricing. The true value of diamonds is very low. The family of companies has a warehouse in Canada filled with rough diamonds that haven’t entered the market. Gold and Silver are the best long term investments. Expect 10% to 30% a year gains for the next 10 years.

  • mountainmama

    Read War Cycles Peace Cycles by Richard Hoskins Then you will understand.

  • Shorebreak

    Too many people watching too many movies and reading too many wacky conspiracy theories on the internet.

  • Nancy

    Last place I would place any metals I owned was with some government. Bad idea.

  • Son Luong Nguyen

    I don’t know the situation in other nation. But in Vietnam, if you let people know that you have lot of money, you’ll be interference to spend that money inside the nation to the last penny, for some meaningless reason rather than for yourself.

    They have decades of experience “cướp của người giàu, chia cho người nghèo”.

    So my idea is to spend it abroad for yourself, before it become too late…

  • The Federal Farmer

    Robin Hood was Vietnamese?

  • The Federal Farmer

    Man, everyone votes. Voting does no good. You vote for tweedle dee and I vote for tweedle dum. Back and forth and the only change we get is fewer liberties and higher taxes.If we all stopped voting could they still claim to represent us?

  • Son Luong Nguyen

    Here here, no absolutely not, as well as Perter Higgs but Lenin, Mao Zedong, Robert Hue and also may be Barack Obama…

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