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Can They Freeze Your Bank Accounts?

Posted September 06, 2021

Jeffrey Tucker

I’ve learned to write what is on my mind, in part because we live in crazy times. If sometimes the egregious is possible, especially when it has a recent precedent, that means it could happen.

It was 15 years ago, for example, that I first noticed the CDC’s quarantine power. I revised this observation in January 2020, pointing out that they could lock us all in our homes and restrict travel. They could even close our businesses and churches. I assured readers that I doubted that this would ever be done, only pointing out that the power existed.

People interviewed me at the time and I assured them that I was NOT predicting that it would happen, only drawing attention to the obvious outrage that the government would even claim the power to do so, even if they never used it.

Sure enough, it happened! I’ve sworn ever since to be more blunt about the power of the state and what it can do to us. And also I’ve learned to expect the worst. I’ve even learned to expect the worst of the worst – which is quite a change for this hopeless optimist.

Now I’m thinking about something I mentioned a few days ago. The US froze the assets of banks in Afghanistan, letting nothing in and nothing out. That includes dollars and gold amounting to $9.5 billion. This was designed to punish the Taliban even though it was the US that gave the green light to the Taliban to exercise ruling power in the country. It must be very confusing to the new regime. One day they are considered good guys, the next days they are bad guys, and now they toggle back and forth.

In fact, the people hurt are Afghans. Relatives living in the US can no longer send them money via the banking system. It’s been closed to them completely thanks to the US government. It’s leading to desperation in a time of great emergency — in a country where the US is not exactly the most popular country. If anything these actions drive people to support the Taliban even more, and rally around those who warned that the US is the great enemy.

A Warm-Up Act

According to the Washington Post, the decision to do this was made directly by Treasury Secretary Janet Yellen. It required no change in the law because the US already had the country on the target list since 2001. Of course that didn’t stop the US government from funding with US tax dollars as much as 80% of the government’s budget. It’s infuriating if you think about it: the US spent 20 years keeping this regime going, and then turned on a dime to freeze assets to make it impossible for people to support their own families in that country.

I’ve learned that it is a big mistake to suppose that whatever weird action the US is taking at the time is limited to the circumstances of that particular place and time. You could say: oh this asset freeze only pertains to this one enemy. But what if it does not? What if this is just a practice run to use against any state or people who happens to be targeted by the US at the time?

How can we know, for example, that the same could not be invoked against tax-haven governments in the Caymans, Virgin Islands, or Monaco? We can’t rule it out. Or what if Switzerland resists the US Treasury’s demands to turn over tax records of some one political enemy? If the US can do this to Afghanistan or Venezuela, what precisely is to stop the US from doing the same to any other country? Certainly it doesn’t matter whether and to what extent the US has foreign nations within its shore. After all, Afghans here are not permitted to send money to relatives in the country of their origin.

Truth is that anything is possible, including extreme exchange controls.

Think of it this way. Did you ever imagine that your friend in France would be barred from entry to the US for 18 months without warning? That you would be forbidden from visiting relatives in England? That an expat couple living in St. Kitts would be trapped there unable to leave for the better part of a year? That you could not visit Germany if you wanted to? All of this happened in the middle of March last year, with zero warning and on the push by one man. If that could happen, anything could.

The mistake most of us have made has been underestimating the malice and extremism of the governing elite. They have proven themselves – both parties, all ideologies – to be parasites on the world order, taking away our previously recognized rights under any pretext.

Push this Further

An important trend in American politics is for the Biden administration to wage small cold wars against states not controlled by his party in power. Thus we hear nearly daily denunciations of Florida, Texas, Tennessee, and other dissenting states. The Biden administration is even suing the governments of these states for emancipating their businesses and citizens from mask mandates and vaccine passports. The battle is heating up. So much for “one nation”; it’s not now two, and the feds have the advantage.

Stick with me here: what is to stop the federal government from doing to Texas or Florida what the federal government did to Afghanistan? It might sound crazy right now but many crazy things have come true in the last two years. There are many such tools that the Biden administration could use to intensify its attacks. They could eventually come to hit American citizens living in those states directly.

The general presumption that the federal government should be a neutral party with regard to states is no more. The implications of that could be profound. We know for sure the Blue state governors are furious about losing so many of their citizens to Red states. As Congressional representation is reapportioned to incorporate these changes, Blue states will also lose power at the federal level. They will not take this lightly, and they would welcome an intensification of the war.

What Is the Workaround?

Sadly, it is no longer possible to take the rule of law for granted in US policy. Nor is it possible to trust that the courts will act — or even if the courts do act that the US administration will pay any attention to the court’s judgment. After all, the Supreme Court doesn’t command an army. The Biden administration was happy to completely ignore the court’s own judgement on the eviction moratorium.

Consider that this might be a big reason why cryptos are jumping so high these days. With a wallet full of crypto, there is absolutely no way that anyone can prevent a peer-to-peer transaction. It is only a matter of a few clicks and you can send millions without limit to anyone in the world — while completely bypassing the banking system that the US government controls with such impunity.

Here is where crypto becomes enormously practical. It provides a way to keep funds flowing even if the federal government decides to lock down the US banking system in the midst of a financial or political crisis. Even if you have never considered using crypto before, this kind of thing will provide a strong incentive to become an adopter. This would also signal the breakup of the financial and monetary system.

I don’t like thinking about, much less writing about such a calamity. But it would be irresponsible not to learn from what’s happened to us over the last two years. All of this and more is possible. Government owns and controls the money and the banks; the rest of the worst case scenario follows from that alone.


Jeffrey Tucker

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