Slow Burn Capital Controls

A broker reported to me today that their clearing agent is requiring them to mark purchases of AAA sovereign bonds denominated in foreign currencies as “speculative” investments.

Pressure to do this apparently is coming form the U.S. Securities and Exchange Commission (SEC). This means if Congress and the administration request that the SEC take action to “stop speculation” a mechanism will be in place to insure that U.S. investors cannot protect themselves from a falling dollar.

Lest capital controls domestically inspire you to leave the country, you may want to educate yourself about the exit tax that was passed by Congress in the Heroes Act of 2008.