Catching the last plane out

August 12, 2009

Fears of financial collapse have receded, but they shouldn’t be forgotten. This blog has argued repeatedly that the economy is still very much infected by the disease that caused last year’s collapse: excessive debt.  And the problem isn’t going away, what with runaway government spending on stimulus, bailouts, and, potentially, a new national health care plan.

Keeping this in mind, John Rubino’s recent cover story in CFA Magazine remains highly relevant.  How do you protect your assets if the financial system collapses?  Recently that’s been a question for Argentines.  But Americans aren’t crazy to be asking it themselves.

To me, the most interesting part of the article was the sidebar at the end, “A Cavalcade of Confiscation:

Worrying about a government destroying its currency or confiscating its citizens’ wealth may seem a bit paranoid—until you read some financial history. The sad fact is that over the centuries, time and again, governments have spent and borrowed themselves into a box and forced their citizens to bail them out. They debase the currency (which is a tax on savers), impose new taxes, or simply take whatever assets are most accessible. To keep their prey from escaping, they impose various kinds of capital controls, including restrictions on the movement of wealth or price increases. A few historical examples, ranging from ancient to more recent times, suffice to make the point….

(For ease of reading, toggle to full screen mode by clicking the top-right button in the Scribd window below.  Then zoom in with the “+” button.)

Special thanks to the folks at CFAI for their permission to republish this on the blog.

CFA Mag subscriptions are available here.

Rubino’s website is DollarCollapse.  It’s a great source for interesting links.

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