While such a step is not inevitable

History is replete with situations where the middle class of a country has been wiped out as a result of the profligacy of its government. If one believes the risks of such an outcome are high, steps should be explored that will protect one’s savings and wealth. If you believe the dollar is going to collapse, you move investments out of the dollar. One way for US investors is to invest in non dollar-denominated instruments like foreign stocks, foreign bonds, foreign currencies and CDs in foreign banks. Unfortunately, history is also replete with government reactions in such situations. In virtually all, the government prevents its citizens from protecting themselves by imposing capital controls. Rather than government enabling or encouraging its citizens to protect their savings and wealth, they preclude them from doing so via “emergency” legislation. While such a step is not inevitable, it becomes highly probable as less capital enters this country and more leaves. Capital controls are never discussed in advance; they appear as a “surprise,” effectively precluding any protective actions.