Early Investing

The Rise of Financial Censorship

The Rise of Financial Censorship
By Adam Sharp
Date February 11, 2022

A good friend of mine recently bought a house in Florida. 

To secure the best rate, he pledged his stock portfolio as collateral. But he encountered a problem when he went to get a loan from his bank, Wells Fargo.

He owns marijuana stocks. Publicly traded companies that grow cannabis in the U.S. Apparently this sets off alarm bells at Wells Fargo.

His mortgage representative told him that his brokerage account is now “tainted” — even if he sells the cannabis investments. My friend has (had?) an excellent credit score, by the way. 

Luckily, he was able to figure out another way to collateralize the loan and still get the place.

Operation Choke Point

I suspect Wells Fargo’s actions are a continuation of an old program called Operation Choke Point, which started back in 2013. This Department of Justice (DOJ) initiative allows government officials to essentially shut down banking services to businesses they don’t like.

Here’s what American Banker magazine wrote back in 2018 about Operation Choke Point, in an article titled “There’s no downplaying the impact of Operation Choke Point” (emphasis mine):

Operation Choke Point was real, and it exceeded legal limits. Overwhelming evidence, in the form of more than 900 pages of newly unsealed emails and depositions, proves government officials illegally targeted lawful businesses in an ideological crusade based on personal disdain

If there were other reasons at play, these regulators would not have needed to resort to backroom pressure tactics, including threatening the jobs of Federal Deposit Insurance Corp. officials and bank executives with criminal prosecution unless they cut off banking relationships with small-dollar lenders and other lawful businesses.

Operation Choke Point targeted at least these three types of businesses:

  • Cannabis
  • Firearms
  • Pornography.

No major resistance was ever mounted against the program. In 2017, the DOJ sent a letter to Congress saying it was ending the program. But the program’s tactics appear to be going strong. And the problem is getting worse.

The Canadian Trucker Convoy

A few weeks ago, a Canadian law was set to go into effect that would have required U.S. truckers coming over the border to be fully vaccinated against COVID. 

In response to this action — and other restrictions — a large convoy of truckers decided it was time to get their rights back. So they formed a huge, miles-long convoy of vehicles and headed to the capital city of Ottawa.

The group had raised more than $10 million on GoFundMe. They even got a donation from Elon Musk. Then the Canadian government demanded GoFundMe shut down the fundraiser. GoFundMe agreed to end the fundraiser, citing reports that the truckers had been violent (of which there is little to no proof). Now GoFundMe is keeping the money, saying it will distribute it to worthy charities. 

Eventually a workaround was found through GiveSendGo, a Christian fundraising site. They have now raised $8.7 million. 

There are still thousands of people protesting around the Parliament building in Ottawa today. They’ve been there for almost two weeks, and they demand an end to all COVID restrictions. The government refuses to even meet with them.

21 Bitcoin Raised for Truckers So Far

In an inspiring twist, people are also raising funds for the Ottawa protest using bitcoin.

According to well-known bitcoin advocate Greg Foss, they have now raised 21.25 bitcoin worth more than $900,000 from more than 5,000 donors. The money will support the truckers and other protestors in Ottawa.

This demonstrates exactly why bitcoin is so important. We’re living in a world of rising financial censorship, and bitcoin gives us an alternative.  

As I wrote in my “Paypal Censorship Highlights Bitcoin’s Importance” article, this problem isn’t going away anytime soon. In fact, it’s almost certainly going to get a lot worse.

Sovereign forms of money — such as bitcoin, gold and silver — are critical tools for this period. Especially when you factor in inflation. We just got an official 7.5% annual CPI print this week, so I’d say real inflation is probably well over 10% at this point. Cash in the bank and a lot of bonds are essentially losing 10% of their purchasing power every year. 

Combined with the threat of financial censorship, I’d say sovereign assets are on their way to becoming a required part of the modern portfolio.

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