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. Itâ€™s 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 â€śat the national levelâ€ť to stem this flight of funds and prevent people from moving money abroad. Capital controls by any other name should smell so foul.