Capital is often not free, but you are. Prepare to use that.

One of the things I learned about researching hyperinflation is Gresham’s Law. That says that in inflation, people want to PAY with the inflating currency and GET PAID with a non-inflated one. The original form of Gresham’s Law related to paper currency versus coins and later coins containing precious metal versus base metal coins. Inflated money is the current incarnation of being forced to use currency that is worth less than other currency.

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We have legal tender laws in the US.

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Those sort of capital controls for certain transactions.

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Capital controls are one of the Five Bad Laws that nations pass when their currency hyperinflates.

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Basically, I oppose all that stuff. Simply, I believe in the free flow of capital with the parties to each transaction picking the currencies or other assets to be transferred and the courts enforcing whatever agreement the parties made.

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I was in the 82nd Airborne Division in 1969. That means paratroopers. There is another group in the division called riggers. They pack the chutes in the backpack for the jumpers. The riggers must themselves also be paratroopers and they must jump periodically using the chutes they packed only they must jump with a randomly chosen packed chute. Obviously, the reason for that is to make them careful about how they pack every chute because any of them may be the one they themselves jump with.

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I think the Fed directors who are suppose to prevent inflation and deflation should get paid similarly. Maybe non-transferrable 30-year Treasury bonds as their only pay. That way, if they permit inflation, the purchasing power of their own pay drops. If they allow deflation—depression—they get paid in “junk silver,” a non-fiat money asset. Silver prices would fall during deflation.

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I would repeal and ban legal tender laws. The parties to a transaction decide what assets or services they promise to give to the other person and courts will enforce the contraction question.

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Most of the discussion about capital controls, legal tender laws, and Gresham’s Law pertain to the perspective of the federal government. As I often say, I have near zero interest in what the government ought to do and will do. I am interested in what you and I need to do to avoid being “stepped on” by the government.

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Thus my recommendations that all of the above be outlawed by Constitutional Amendment. Until that happens, know this basic principle: Most good nations allow freedom of movement for humans. That is, you can move from one country to another including the one you are a citizen of whenever you want.

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Movement of your capital is now or may well be restricted in the future. So move it now. I recommend and have followed my own advice that you own seven foreign currencies and hold them abroad. I do not recommend gold, but if you own it, it should be held outside the US because we may have another Executive Order 6102 in the future.

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If we get hyperinflation, you will probably be allowed to leave the US but you probably will NOT be able to take money with you. Also, if you do not leave, you will almost certainly be forced to give your gold and foreign currency to the US government at a lousy exchange rate. These are all manifestations of capital controls. If you go to another nation and you have non-US currency and/or gold there, you can live off of it as normal. Indeed, if there were two hyperinflated nations. You could go to the other hyperinflated one (not the US) and be treated like a king because you would be allowed to have good currency there while citizens of that nation would not.

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Does that sound crazy? It is. But I do not make the rules. In 1921 Germany, the French, Dutch, Americans, and Brits went to Germany with their foreign currency and lived like kings. Germans were not allowed to have foreign currency in their country, but foreigners could.

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In hyperinflation, currencies may not move, but you can. BUT, in order to do that, you must have a passport that does not expire in the next year. And you must have non-US currency or gold outside of the US. You do not need to go to the same place where your foreign currency is. You can access foreign ACCOUNTS from almost anywhere on earth via ATM cards and wires. If, however, you have gold or foreign currency in the form of cash, you must go to THAT nation to access it.