National fiat currencies represent the common stock of nations. Because of the large amounts of capital involved they usually move slowly according to trend. As their share price sinks, despots implement doomed currency controls, enforced by violence in a vain attempt to artificially increase price.
Notice how the FRN$ trended downward with the 200dma tracking the 50dma. Then a convergence happened and there was a very steep strengthening. Likewise, the 50dma and 200dma have recently converged and the slope of the declining curve is particularly steep. The trend is changing.
CURRENCY CONTROLS
Currency controls, or foreign exchange controls, are imposed by governments on the purchase, sale, convertibility, or use of foreign currencies. They are gross interferences with the unalienable human right to freedom of contract.
Most people think that currency controls are only implemented in ruthless socialistic, communistic or fascist countries like Russia under Stalin or Lenin, Germany under Hitler, Zimbabwe under Mugabe or other oppressive regimes like China, Argentina, etc. Viewing explosive history through the lens of monetary policy reveals a common thread. Dictators attempted to abrogate monetary rights and the people either killed them or were killed.
Harvard Professor Niall Ferguson wrote on page 149 of The Ascent Of Money about the French Revolution, which seared the gruesome visage of the guillotine into the hearts and minds of French politicians.
Not surprisingly, some people began to anticipate a depreciation of the banknotes, and began to revert to payment in gold and silver. Ever the absolutist, Law’s initial response was to resort to compulsion. Banknotes were made legal tender. The export of gold and silver was banned as was the production and sale of gold and silver objects. By the arręt of 27 February 1720, it became illegal for a private citizen to possess more than 500 livres of metal coin. The authorities were empowered to enforce this measure by searching people’s houses. Voltaire called this ‘the most unjust edict ever rendered’ and ‘the final limit of a tyrannical absurdity’.
Money and currency are essential and unalienable human rights. The use of force or intimidation against innocent people is immoral.
With the pot calling the kettle black, Vladimir Putin said,
The only problem: your [U.S.] results were poor [Georgia] and this will always be the case because the work you do is unfair and immoral. In the long run, immoral policies always lose.
Following the example of so many other failed nation-states, as the FRN$ has evaporated additional currency controls have been put in place by unfair and immoral politicians.
One of America’s greatest tyrants, Franklin Delano Roosevelt, exacerbated the rapidly shrinking United States' share price. He greatly infringed on the Great Writ of Habeas Corpus, implemented Executive Order 6102 (.pdf), passed New Deal legislation, threatened to pack the Supreme Court if they did not vote his way - resulting in a ‘Constitutional revolution’ and implemented extremely restrictive SEC rules.
At least Roosevelt was not as tyrannical as Abraham Lincoln, who, among plenty of other nefarious things, issued an arrest warrant for United States Supreme Court Chief Justice Roger when the Court checked Lincoln’s abuse of Habeas Corpus.
Then on 15 August 1971 Richard Nixon, who said he was not a crook, unilaterally declared international bankruptcy for the United States by refusing to honor the promise of gold convertibility. Now the federal government has no intelligible answer to ‘What Is A Dollar?’ and yet strut around in their costumes robbing people if they do not like how their unintelligible definition is applied.
CURRENT DOLLAR CURRENCY CONTROLS
Many currency controls trammel the FRN$. For example, there are ‘qualified intermediary’ rules the Infernal Revenue Service require foreign banks to follow. The PATRIOT Act allows for ’sneak and peak’ warrants along with the ability to confiscate cash at will and in secret.
A particularly insidious but scarcely mentioned currency control was implemented by the United States Mint on 14 December 2006 which provided:
The United States Mint has implemented regulations to limit the exportation, melting, or treatment of one-cent (penny) and 5-cent (nickel) United States coins, to safeguard against a potential shortage of these coins in circulation. … Prevailing prices of copper, nickel and zinc have caused the production costs of pennies and nickels to significantly exceed their respective face values.
“We are taking this action because the Nation needs its coinage for commerce,” said Director Ed Moy. “We don’t want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer. Replacing these coins would be an enormous cost to taxpayers.”
Specifically, the new regulations prohibit, with certain exceptions, the melting or treatment of all one-cent and 5-cent coins. The regulations also prohibit the unlicensed exportation of these coins, except that travelers may take up to $5 in these coins out of the country, and individuals may ship up to $100 in these coins out of the country in any one shipment for legitimate coinage and numismatic purposes. In all essential respects, these regulations are patterned after the Department of the Treasury’s regulations prohibiting the exportation, melting, or treatment of silver coins between 1967 and 1969, and the regulations prohibiting the exportation, melting, or treatment of one-cent coins between 1974 and 1978.
The new regulations authorize a fine of not more than $10,000, or imprisonment of not more than five years, or both, against a person who knowingly violates the regulations. In addition, by law, any coins exported, melted, or treated in violation of the regulation shall be forfeited to the United States Government.
Notice the underlying assumptions Mr. Moy makes evidenced by ‘the Nation needs’ and ’see our pennies and nickels’. Who owns the penny or nickel in your change jar? Are one-hundred nickels five dollars? Are one-hundred pennies a dollar? What Is A Dollar?
If you own the penny or nickel then why would you be prevented from doing whatever you want with your property so long as you do not violate another person’s rights or harm their legitimately acquired property?
Often I receive questions about the ultimate form of currency control: gold confiscation, which I think is highly unlikely.
