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Thursday, November 11, 2010

Barriers Rise to Movement of Capital

“As the leaders of the 20 major economic powers gather in Seoul, an increasing number of them have either imposed curbs or are in the process of doing so to slow the torrent of hot money into their markets…. Once a core policy commandment of the so-called Washington consensus and held dear by the United States Treasury, the International Monetary Fund and global investment banks, the belief that unfettered capital flows are a boon for everyone — including the country on the receiving end — has been dealt a major blow. Short-term investment is now increasingly viewed as something that needs to be controlled.” (New York Times)

Unfettered capital flows along with deregulation, desubsidization, and sound money all go together.

FEE Timely Classic
“The Ultimate Source of Wealth” by Charles Dykes