Tuesday, October 14, 2008
Martial Law Explained
A while back, right after the $700 Billion bailout was being worked out, someone pointed out that they thought they heard Nancy Pelosi mention “Martial Law” in one of her speeches. If the government was to impose Martial Law, it would only apply to banks and financial institutions. Most likely what would happen is that the government would impose strict withdrawal limits (in amounts withdrawn and number of withdrawals per day or week or month) on bank accounts, 401(k)s, money markets, CDs, stock sales, etc. They would also restrict banking hours and may even limit the number of days the Stock Market is open for trading. Europe is already doing this to some extent. Some European stock markets have suspended trading (on and off) and some banks are imposing withdrawal limits (2 withdrawals per day, and I believe there is a total amount limit as well) and limited banking hours in order to prevent a run on banks a la The Great Depression. This is a drastic step, but I do not think it is necessarily a bad thing because banks and markets collapse when hoardes of people make a run on them. I do not like the thought of Martial Law on any level, but this may truly be for our own good — as long as it remains limited to banks and financial institutions and is imposed for a very limited time (and BHO is NOT involved).