Capital controls are the biggest danger to your savings and wealth – PRWeb

Capital controls are the biggest danger to your savings and wealth – PRWeb


According to Simon Black, co-founder of the asset protection blog Sovereign Man, "Capital controls are the biggest danger to your savings... period. Alarm bells should be going off right now around the world."
With Greece dwindling on the edge of national bankruptcy, and everyone from pundits to politicians discussing the country's imminent departure from the eurozone, European leaders are now openly discussing the use of 'capital controls' as part of a contingency plan.
So what exactly are capital controls?
Simply put, capital controls are measures designed to restrict the flow of capital in, out, or through a nation's borders.
In the event of a financial crisis, for example, a government may prohibit foreign exchange transactions, set limits on bank withdrawals, or impose steep taxes on cross border transactions.
"The idea behind capital controls," Black explains, "is to prevent too much money from being pulled out of the country in a panic. Unfortunately, don't address the fundamental problems-- they just end up bailing out the banks and government at the expense of the people."