If rate cuts and currency-market interventions don’t do the job, capital controls -- the introduction of taxes and prohibitions to regulate the flow of money into and out of a nation -- may creep higher up the agenda of increasingly desperate central banks.
Three years ago, the International Monetary Fund softened its strict opposition to such strategies, conceding that "in certain circumstances, capital flow management measures can be useful," with the caveat that "they should not, however, substitute for warranted macroeconomic adjustment."Further sign of a breakdown of the neoliberal order? The big boys love neoliberalism until it hurts them.
Bloomberg View
Currency Wars Have a Nuclear Option
Mark Gilbert, Bloomberg
ht/ Yves Smith at Naked Capitalism
ht/ Yves Smith at Naked Capitalism
1 comment:
Once again the focus is on money.
What you should do is ban certain financial operations (largely borrowing money for currency speculation), and restrict the import of expensive items targeted at the rich.
The controls should be in real terms.
And of course a simple stamp duty tax on foreign exchange repayable against tax for real activities limits speculation.
I've always found it amusing that we have stamp duty on buying shares in real companies, but not on money changing.
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