What does it mean to have currency/capital controls?

[coyote]

Yes I know what the terms from an academic standpoint. But does anyone know what it means at the Joe Sixpack level. Will I not be able to take money out of the bank? Is my saving going to be worthless? Hyperinflation? Deflation? Just wondering if anyone for example had a real life experience. Perhaps someone knows what what is was like in Mexico or Argentina when they used capital controls.

[nadinbrzezinski]

1. In mexico they never got overboard compared to Argentina

Here is what was done in Mexico.

The gov'ment knew that people were taking their money and running, aka taking it to the US. To prevent the capital flight they first told people you cannot take more than 10K Dollars without declaring it, mind you not pesos Dollars... and in the end cross checked with the US government unsing the anti drug laws.

When this did not work, they had people declare 500 USD when going away on vacation

When this did not work, they refused to sell more than 200USD per week and with clear records of who they were sellnig it to... and they added a premium over the exchange rate.

In argentina they did all of this, and added... limits on how much you could take out of the bank at a time and per week.

Yes at a joe six pack people will sooner or later notice and the Argenitinians did that to avoid a rush on the bank from desperate people... yes people lost their shirts

[coyote]

4. thanks for that

to me it seems like its definitely coming and have contemplated moving some money outside the country. I do not know if I am being alarmist or not. However, there are definitely some severe structural problems with the US economy that are raising huge red flags for me.

[nadinbrzezinski]

5. I don't have enough to do this myself

I keep telling my parents to do that... they have seen this movie and tehy cannot believe it is coming

[papau]

2. Money is worthless outside of country. when Egypt

used capital controls - and the value of a dollar was 10 times the posted value -- but it was a serious crime to exchange on the blackmarket-

- you exchanged via the gov exchange rate and were robbed - and then tipped with real US dollars - which meant you got great Service!

I'm not sure the folks in the US are ready to put on the sad , friendly, face of the person looking for anything except his country's currency. Holding gold outside of the country was what many of my friends did!

:-)

[nadinbrzezinski]

3. Yuo know you and I have seen this movie

and I am sure we are taking steps already, but joe six pack has not