Guest Post: Is The IMF Now Recommending Capital Controls…?
by Simon Black
It takes all of three seconds on the ground in Spain to realize that this country is hurting. Big time. Itâs amazing what the combination of debt, deceit, and a bona fide banking collapse can do to a nation. Consequently, depositors are moving money out of the country en masse, often to the tiny principality of Andorra next door – a highly capitalized, low tax banking jurisdiction. This leaves the already thinly-capitalized Spanish banks in an even weaker position. As we have painstakingly pointed out a number of times, the way the banking system works in most of the world is a complete fraud since most banks only hold a tiny percentage of their customersâ deposits in cash. The moment there are more than a handful of depositors wanting their money back, the bank has a big problem. This is happening nationwide in Spain. As such, the IMF is now recommending that Spain (and other nations in the eurozone periphery) take action âat the national levelâ to stem this flight of funds and prevent people from moving money abroad. Capital controls by any other name should smell so foul.