Thursday, September 25, 2008


On Sunday, I wrote:

If all that proves insufficient, expect literally anything: national bank holidays, market shutdowns, restrictions on gold ownership, and capital controls.

On Tuesday, Marc Faber, who nailed the current situation far in advance, said (via Barry):

The next emergency measure will be that Americans are not allowed to buy foreign currency and transfer money overseas, and the next measure will be not permitting Americans to buy gold and so on and so forth...

Readers know what I think about most of the apocalyptic financial commentary that's become fashionable in recent years. But I'll say it again (and it's not meant as financial advice): personal savings are not safe if kept in the current system. I mean that less in terms of nominal access to one's money (though nothing should be ruled out) than confiscatory inflation and capital controls. Today's business? Probably not. But by the time the pollyannas and shills start pushing an updated version of mark gleich mark on the public, the time to protect oneself will have long since passed.


Blogger J. said...

But if every American with money in the bank and/or the market pulls it out, we really will have an even bigger crisis on our hands.

There are (or so I've read) plenty of good, solid U.S. banks out there -- and plenty of good, solid U.S. companies worth investing/buying stock in.

Please do not fan the flames any higher, CR.

Part of what got us into this mess was speculation and rumors. (And no, I am not discounting or ignoring bad lending practices, shifty accounting, overleveraging, and greed.)

9/25/2008 2:59 PM  
Anonymous Anonymous said...

Can you name those good US banks?

9/25/2008 5:05 PM  
Anonymous Anonymous said...

From the US Comptroller General of the US, "US Government Immorality Will Lead to Bankruptcy" (Note: It's a google video of his appearance on 60 minutes.)

Author of "Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism", Kevin Phillips on Bill Moyers Now.

Man this feels like a Katrina just hit the Nation, and Bush gave it the same sort of fly over response, too late, too little, topped with his special Iraq war on lies whatever sticks, don't ask blank check. Granted this has been brewing for 30 years, and I hate to say it but my local Republican House Representative has been right in line with the Republican party and he keeps getting reelected, but this administration exacerbated an already bad situation and wasted 8 years.

It's hard to have faith in our leadership and Wall Street, when they keep screwing us over. It is costing us our livelihoods, our health, our freedom and time, and our futures. And they do so with no accountability or remorse. They certainly do not put country first. We need people to actually follow the Golden Rule, business and political leaders, as well as every individual. We need straight talk, we need the truth, and we just need to clean house and get rid of the crooks in high places. When the Nation was in trouble after 9/11, we heard many joined the military to save our country. Our country needs saving again, so what do they do, stay in school and become bankers, lawyers, scientists? This is where we need leadership that can do more than one thing at a time, that is level-headed, a good communicator and will bring people together so we can make the best decisions for the Nation and not just the wealthy. I believe the right people can do that. I do not believe the right people have been in the WH for the last 8 years. They have created and/or fed an environment that allowed these awful things to happen to our Nation and our citizens.

We'll manage, or cease to exist, in which case, our country will be bought and sold to the highest bidder. I suppose we had better learn to speak Mandarin I guess. ;-|

9/25/2008 5:25 PM  
Anonymous Thomas Daulton said...

Hmmmmm... I currently live in Mexico. Something like 30% of the Mexican economy relies on "remittances" (Mexicans who work in the U.S., legally and illegally, wiring cash back home).

If they stop Americans from wiring money abroad, they couldn't possibly leave that option open for Mexicans. If Mexicans in the U.S. are not allowed to wire money home, I'm guessing the Mexican government might view that as an act of war.

Another example of, "When the U.S. sneezes, Mexico catches a cold," as they say around here.

(For anyone who really thinks Mexican immigrants wiring money back home is a problem... even though, as others have pointed out, if a farmer or other business owner can't get Americans to pick crops and clean hotels at the wage he wants to pay, it's not anyone else's responsibility to fix up his bad business model for him...
...don't worry, there is a lot of evidence that this problem will simply dry up and disappear as, (a) the U.S. economy continues its decade-long spiral into the toilet; and (b) Mexicans practice better birth control, resulting in fewer unemployed young males.)

9/25/2008 5:29 PM  
Anonymous Anonymous said...

"If Mexicans in the U.S. are not allowed to wire money home, I'm guessing the Mexican government might view that as an act of war."

Not to be flip here, but so what?

Is Mexico going to declare war on the US? The only thing America is good at these days is blowing things up, and Mexico is hardly a fearsome military power.

9/25/2008 6:20 PM  
Anonymous goldhorder said...

But if every American with money in the bank and/or the market pulls it out, we really will have an even bigger crisis on our hands.
I...obviously...will not be taking that advice. Time to jump ship folks. USS America is a going down. Plenty of gold and sivler live preservers out there. Get them while the gettin is good!

9/25/2008 6:47 PM  
Anonymous Thomas Daulton said...

Anon 6:20: Mexico might view that as an act of war... Not to be flip here, but so what?

No, Mexico [probably] won't take military action against us... (although it's worth noting that they have, with our help, hugely expanded their military capabilities under the aegis of "anti-drug policy". They're still not a military threat to us today, but as U.S. capabilities degrade due to overreach and funding loss back home, that might change towards the end of my lifetime...)

...But watch what happens to the U.S. economy if Mexico decides to stop exporting oil to us, or jacks up the price as retaliation. (Mexico's export production has been declining significantly for years; something like my scenario might give their leaders the excuse they desperately need, to preserve that resource for domestic use instead of exporting it.)

Watch what happens to the U.S. economy if Mexico punitively confiscates U.S. corporate assets and takes over factories that have been built with U.S. investments. The powerlessness works both ways: The U.S. public won't easily be sold on a shooting war with Mexico over a few "Gap Jeans" factories; politicians won't be eager to remind the public that we shipped all our jobs there decades ago. But on the other hand, GE and Westinghouse manufacture half our military technology in Mexico! If we really piss off Mexico, they could starve the U.S. army for parts just like we blockade Cuba!

This is all just fanciful speculation at this point.

But as TCR warns, nothing is off the table these days.

9/25/2008 7:07 PM  
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