Saturday, January 7, 2012

As Default Nears, Italy Begins Capital Controls

New Italian PM Mario Monti has mandated a cap on cash transactions in Italy of 1,000 euros, and reportedly wishes to gradually reduce this to 300 euros.  Can't have Italians conducting transactions in cash and avoiding taxes and credit card debt, now can we?
Italy has also set up checkpoints at the border to Switzerland to search Italians for illegal contraband (cash) fleeing the Euro for the safety of Switzerland. 
If you're wondering what to expect when the devaluation/collapse of the dollar is near, look no further than the capital controls currently being placed in Italy for your answer.

Prime Minister Mario Monti, in office just over a month, wants landlords, plumbers, electricians and small businesses to stop conducting large transactions in cash, which critics say helps them evade taxes. The government on Dec. 4 reduced the maximum allowed cash payment to 1,000 euros from 2,500 euros.
Italians are the euro region’s least-indebted consumers and among its biggest savers, according to data from the European Union’s statistics office, Eurostat. Their frugality may be at least partly linked to a distrust of paying with anything other than cash. Italian credit-card holders use their cards on average only 26 times per year, or five times less than in the U.K., according to the Bank of Italy.
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