Border controls, currency controls, wage and price controls– these are the usual tactics of desperate, insolvent governments.
As times get tougher, they tighten their grip, foolishly believing that they can decree and legislate their country back to health.
In the early 4th century AD after decades of economic turmoil and social strife within the Roman Empire, Diocletian issued his infamous Edictum De Pretiis Rerum Venalium, or Edict on Prices.
In addition to setting a fixed ceiling on over 1,000 products, services, and wages, Diocletian also commanded the death penalty for currency and commodity speculators who he blamed for inflation (as opposed to the steady debasement of the currency).
Obviously very little has changed.
Capital controls usually follow; these amount to the direct confiscation of wealth by a government from its citizens.
Often capital controls take the form of legal requirements which prevent people from moving money abroad, holding foreign currencies, or buying precious metals.
Just yesterday, in fact, Argentina’s central bank formally banned people from buying US dollars– forcing them to hold rapidly depreciating pesos and watch their savings inflate away.
At some point, people finally reach their breaking points and spill out into the streets to be beaten by the police. This is when we see social controls implemented– turning off mobile and Internet infrastructure, curfews, etc.
These tactics have been all too common over the last 18-months.
And finally, if things get really bad, border controls are implemented as a way to prevent a flood of people from leaving. After all, the government needs as many milk cows as it can get.
This is why I say that the US passport denial provision has been dropped… but only for now. Don’t be surprised to see it creep up in another proposed law in the near future.
The Committee to Nuke Elysium 