Pay attention to what’s happening in Greece. We’ve posted about this before and things di geh dread as we say in Belize.
Greece is slowly being led to slaughter house and Belize is going to the same place, Greece is at the door, Belize is making it’s way down the chute.
European governments are ready to push for capital controls in Greece
would mean a severe lockdown on flows of cash … strict limits on the amount that could be withdrawn from banks, taken abroad physically, or passed between international accounts.
slam the brakes on outflows of money streaming out of Greek banks, but it would also make it more difficult for the country to recover economically
Capital controls are easy to bring in and hard to get out of.
Greece is on the brink of economic meltdown
Alexis Tsipras, the Greek prime minister, was accused of attempting to “swindle the whole world” following a series of demands made in recent days.
We should work out an emergency plan because Greece would fall into a state of emergency.
The Greek crisis is moving toward a climax. The issue is actually quite simple. The Greek government owes a great deal of money to European institutions and the International Monetary Fund. It has accumulated this debt over time, but it has become increasingly difficult for Greece to meet its payments. If Greece doesn’t meet these payments, the IMF and European institutions have said they will not extend any more loans to Greece. Greece must make a calculation. If it pays the loans on time and receives additional funding, will it be better off than not paying the loans and being cut off from more?
In Greece, government is not only the problem; it’s also the guarantee that no solution can be successful. The Greek debt is the worst case of government debt, accumulated to these gargantuan proportions during some 30 years of irresponsible spending. How could you spend so much money?
Even the conservative government which governed Greece from 2004 to 2009 managed to surpass socialists in spending and borrowing.
Of course, only a small portion of these funds were used efficiently in order to boost growth, invest in public goods and create an adequate social welfare net. Even though the Greek government spent nearly half of its budget on social benefits the result was a low-quality (sometimes third world country-level) welfare state. It is no coincidence that the efficiency of social welfare spending in alleviating poverty was the lowest in EU.
The inefficiency was not only the result of a bureaucracy of Kafkian proportions but also the deliberate “spillovers” of these benefits to the government “middlemen” (e.g. corrupted tax collectors) and interest groups with the power to pressure for redistribution in their favor (e.g. closed professions).
Keep updated on the Greek Crisis here.
What is Capital Controls you ask?
Capital controls are residency-based measures such as transaction taxes, other limits, or outright prohibitions that a nation’s government can use to regulate flows from capital markets into and out of the country’s capital account.
Any measure taken by a government, central bank or other regulatory body to limit the flow of foreign capital in and out of the domestic economy. This includes taxes, tariffs, outright legislation and volume restrictions, as well as market-based forces. Capital controls can affect many asset classes such as equities, bonds and foreign exchange trades.
Tight capital controls are most often found in developing economies, where the capital reserves are lower and more susceptible to volatility.
As you can see from the last article we posted and the two noted above, Belize is quickly digging itself deeper in the same hole that Greece started. Why are we not looking at the examples around us to see what is being done to us by the international banking complex and the unions that we keep blindly signing into?
Capital controls should be thought of as a set of administrative constraints which seek to prevent deposits leaving the banking system while still attempting to allow “normal” economic activity to continue.
Hence limits are imposed on the ability of households and firms to withdraw their deposits in cash, or to move them out of country concerned. Basically, people cannot take their money out of the banks but international companies can do so with special allowances.
The CSME is a small scale version of the EU but with the member countries it scales the same and Belize is the Greece of the CSME and the CSME goals include:
- Harmonisation of taxation systems, incentives and the financial and regulatory environment
- Harmonisation of fiscal and monetary policies
- Implementation of a CARICOM Monetary Union
Moreover, it may well be asked whether we can take it for granted that a return to freedom of exchanges is really a question of time. Even if the reply were in the affirmative, it is safe to assume that after a period of freedom the regime of control will be restored as a result of the next economic crisis.
—Paul Einzig, Exchange Control , MacMillan and Company, 1934.
Let’s here your thoughts, leave a comment below.
- Inside Greece’s Troubled Debt Negotiations (thetakeaway.org)
- VIDEO: The IMF Walks Out of Greece Bailout Talks (truthdig.com)