Nothing scares the central planners, the political control freaks, like economic liberty. This is because their power is derived in large part from restricting the liberty of others.
New money scares the establishment because with new money come new ideas. With new ideas old power structures begin to crumble.
The people who run “the show” are not interested in any new challenges whether those people are in the Chinese Politburo, or in the boardrooms of the Federal Reserve. Kings always resent those who are not compliant subjects. They fear when the “subjects” have economic freedom, or even a degree of it. History has shown us this over and over. Better to have a population reliant on the state (think Social Security – this is a broad statement, don’t flip out SS fans) than a prosperous and independent population.
And while China has been doing everything in its power to halt the capital flight, or at least give the impression there no longer is one, going so far as the central bank directly manipulating the currency by directly crushing the shorts in terminal short squeezes and margin calls to telegraph to the world that there is no legitimate capital flight, actions out of China suggest otherwise, and it now appears that – in the latest good news for bitcoin bulls – China is once again cracking down on capital controls as hot money outflows have not only not stopped, but may again be accelerating.
According to the SCMP, to greet the New Year, Beijing will implement new limits on the amount of money people can withdraw from their Chinese bank accounts while overseas, “in the latest move by Beijing to tighten its capital account controls and curb money outflows.”
Under the new rules individuals will be allowed to withdraw a maximum of 100,000 yuan (US$15,000) a year, regardless of how many separate bank accounts or ATM cards they have, China’s FX regulator, the State Administration of Foreign Exchange said in a statement released on Saturday.
Under current rules, there is an annual ATM withdrawal cap of 100,000 yuan per bank card, but there are no rules to stop people having multiple cards attached to a single account or multiple accounts with different banks. So apparently, the PBOC finally figured out the oldest trick in the book that Chinese residents were using to game the regime.
Meanwhile, the existing cap on daily withdrawals remains unchanged at 10,000 yuan per card. People will still be allowed to hold multiple ATM cards but the annual limit will apply to the combined value of all withdrawals.
So, $15,000 a year huh? I don’t see that going down well.