“I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” – Winston Churchill.
Recently, traveling through a major airport in Europe I noticed that new security measures have been put in place. This isn’t really about terrorism, as many have been led to believe, but rather about stopping capital outflows- restricting the flow of wealth across borders.
Precious metals are one such example of a monetary asset which will be confiscated if evidence cannot be given as to how they were purchased. There is a 10,000 Euro limit on non-declarable cash and cash equivalents when traveling around Europe. No doubt the same thing will be true in many other parts of the world too. Be aware that this limit will not increase in the near-term, so a devaluation of the currency will mean that asset classes that hold their values against devaluation will become increasingly less mobile.
Asset seizure is also evident in Denmark, where immigrants will face asset seizure on the border.
The great hunt for taxes has begun in earnest and the hunt for taxes does not stop with precious metals- physical holdings of bonds, stocks, or cash must also be declared. It will not only be necessary to show custom border agents that purchases of assets have been carried out in a manner which complies with the local laws and regulations, but to also prove the value of the assets are not over the limits specified.
“Innocent until proven guilty” does not apply to customs agents, no court trial will be given, guilt is assumed in the initial exchange. In this instance the burden of proof lies with the individual holding the assets. Therefore it is recommended that travelers carrying unusual assets which might raise suspicion provide a paper trail in advance to show that this is not an example of money laundering, or criminal activity. Of course, laws are only as good as those enforcing them- if custom agents themselves become sick of carrying out what they perceive to be unjust laws, which they may, this entire legal structure may fall apart.
This raises an interesting opportunity- if you are young and cannot find a job, why not apply to the immigration agency? Their budget will swell over the coming years. People need to eat, afterall, but do not expect to be looked on kindly by travelers if you are seizing their wealth.
Meanwhile, the drive for 100% electronic cash continues, with both the Eurozone and the US considering removing their higher denomination notes from the printing press. As public budgets come under increasing pressure moving into 2017, people will come to realize what these controls are truly about.