Suppose I sell my house and get a pile of cash. The USA government wants to get some or all of my money if I try to move it to another country. That's not fair. It's mine and I already worked for it and paid income tax on it. I want ALL of my home money. Can I put it into bitcoin in the USA and visit Nicaragua and get my money out a bit at a time, as needed, there?
closed as too localized by Nick ODell, goodguys_activate, Stephen Gornick, cdecker, o0'. Mar 11 '13 at 12:19
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Bitcoin has no concept of borders.
There are many trades in which the buyer doesn't know the seller and vice-versa (or both, like in a dead drop where neither knows anything about the other).
So it is entirely plausible to cash out bitcoins in a foreign country without any other parties other than you and the seller knowing about the transaction.
Your example describes where you have a "pile of cash". It doesn't matter if the cash is from the proceeds after selling a house or whatever, those funds can be converted to bitcoins in any number of ways.
So yes, bitcoin is like cash, and can be traded for cash. Where it differs from cash is that it can be transported across borders physically, electronically, or in no form other than words you keep in your brain.
Because bitcoin transactions are traceable, those preferring to transact privately can employ method called "mixing". This gives bitcoin user-defined anonymity.