Let's say that all Americans take their cars, drive them pass the border sell them in Mexico and with the money theybuy property there.
Is that capital outflow or not?
It should be exports, it seems, though it sounds as funny. If we think along these lines, then we need to consider all exports as sort of capital flight, right? For example, Japan is famous for the quality of their cars, so it is no surprise they are exporting a lot of them. Can it be considered a capital flight if the cars get sold in the USA for the American dollar? Since Japan seems to be running a trade surplus (I don't really know), some dollars should be spent right there, in the US. What do you think?
No, those can't be exports.
I've already said that with the money from the purchase the Americans buy property there (of course in reality they would blow it all in Cancun but ..).
So they can't be exports since no money flows back in the US.
I said it too that some part of money doesn't come back to Japan either. So is it capital flight as well according to your reasoning? And what if Japanese car producers relocate
their production capacities to USA? How would you count that, as production flight, which is even worse than capital flight? What about Trump going mad over American producers moving to China and leaving unemployment behind them in America?
It's still capital outflow.
Okay. In all honesty, that's what I think myself. And from this perspective, bitcoin is a form of capital too. It is not what I challenge or question in itself. But here's the catch. If crypto is a form of capital, we could expect governments to accept this fact somehow. If they don't and don't want to, then it means that they can't crack down on people for "moving" bitcoins or whatever coins out of the country, right? Otherwise, it will be an act of hypocrisy, won't it?
Let's go to the next and most radical example ever.
Everyone pics their home, their jewelry, cat, dog, car, Frisbee and Wii and moves them over the border.
Everything is moved from country A to country B.
But still country A with nothing left standing will have all it's fiat money while country B will do the same but with twice the capital.
There was no fiat exchange between the two, yet one has gone kaput the other one thrives.
It's still capital outflow.
This is called a brain drain, if I'm not mistaken.
