End Game, Gold Investors Will be Destroyed

[PatColo]

from 6/15, don't see this posted already.

End Game, Gold Investors Will be Destroyed (http://www.marketoracle.co.uk/Article20327.html)

Gold investors (myself included) are trapped at the end game, and they do not even realize it yet. No physical confiscation is needed to wipeout the gold hoarders. It is much simpler than that. At the end game, the gold investors will throw their gold into the streets willingly (or bury in ground forever). The physical gold will be useless. You don't think so? I will prove it.

[DMac]

lol... long story short - gold will be useless because the government will be offering better returns on bonds.

[keehah]

Interesting, I like the fact that it was quite original analysis.

The logic all fell apart here near the end though:


Those of us holding gold+silver, will have huge capital gains from the former hyper-inflation, and we will have no way to avoid paying those taxes in order to get some of this new currency, because the new currency will require proof of the price paid for the gold (otherwise full value will be accessed as is the law for capital gains). This new currency will effortlessly destroy the black (barter) market. Let me explain why. The new currency bonds will be offering very high real, after tax interest rates, and these gains (say 20+% per year, if not much much higher) will be accrued in redeemable to gold! So it will be preferable to hold the currency bonds, than to hold physical gold. So who would have an incentive to use the blackmarket in physical gold? The buyers (private sector-at-large) will have 0 networth, so they can only pay in the new currency which they have borrowed, so they can not participate in the black market. We gold+silver investors will want to trade for something we need, and that will be difficult because the sellers of products will want the new currency, because everyone will want to buy the very high yielding new currency bonds, and because without reportable sales, a business won't be able to get a loan to expand and grow.

Author cannot see outside the doomed system IMO.

[gunDriller]

and on Tuesday August 10, there's a real good chance the Fed will be announcing QE2, quantitative easing #2.

i don't have a Fed meeting schedule in front of me.

in any case, as guys like Denninger have proven, the Fed is continuing to print money, beyond the $300 Billion of QE they announced in March 2009. they just don't talk about it.


the only reason the US $ is worth anything is because people act like it's worth something.

how people act can change fairly quickly.

given that the US gov. has debt obligations of about $100 Trillion, the term "QE to Infinity" seems applicable. That is an astronomical amount of money - light travels 6 Trillion miles in one year.

plus the US gov. has to pay interest on this debt. they used to call that the "magic of compounding".

[palani]

So these new bonds yielding 20+% interest convertible to gold .... they had better start prospecting NOW because the currently supply of gold does not increase at 20+% annually. How can one system be convertible to another when they grow at different RATES?

[keehah]

It would make sense if you are of the mind I am its probable that gold could be made by transmutation at some cost above today's price.

Set the official gold price at higher than your production costs, keep society too dumb to figure this out: Voila! The new fiat money. Have fun controlling society for another hundred years!

Silver is the honest one. Will be priced below gold as per historical convention, yet probably not much different in laboratory cost in making it over gold.

[gunDriller]

It would make sense if you are of the mind I am its probable that gold could be made by transmutation at some cost above today's price.

Set the official gold price at higher than your production costs, keep society too dumb to figure this out: Voila! The new fiat money. Have fun controlling society for another hundred years!

Silver is the honest one. Will be priced below gold as per historical convention, yet probably not much different in laboratory cost in making it over gold.


sometimes i wonder if a meteor shower of gold and silver meteorites will cascade down upon us and instantly double the world supply of precious metals.

or they'll discover a mother-lode when enough glaciers melt.


but what i know for sure is that the banksters, central or otherwise, can not be trusted, and that they will try to convince the public to accept their latest model fiat currency, and that this is a losing proposition.

if they couldn't be trusted to manage the last fiat currency, why should they be trusted to manage the new fiat currency ?

Gold and Silver and Pd and Pt are forms of money / stores of value that don't have the Deep, Deep, Deep trust issues of the banksters.


So i would say that Shelby_H_Moore, the author of the original article, is engaged in mental masturbation and that, if he is done, the proper thing to do is to offer him a Kleenex.

[Ragnarok]

"Paper gold" investors are who will be destroyed. Those holding metal will not - at the very worst their metal can be made into jewelry which can be worn and/or sold for other uses.

As for cheap transmutation of one element into another, stars are the only option, and for elements heavier than iron you need a supernova. Not exactly a friendly laboratory environment!

2c, R.

[cedarchopper]

The author's scenario is plausible, that gold and silver inflation adjusted returns will be wiped out by capital gains taxes on conversion to a new currency regime. The only problem with this is that some counties exempt pure gold and silver from taxes...so these countries would become the centers for converting into any new currency. Americans may be trapped, but Middle Eastern, Asian, (maybe S. American), some Europeans, Russians, etc. would be able to convert without a problem...which would be the end around on this author's so called trap.

[Saul Mine]

Nearly all of his argument is based on an assumption that people will pay any tax demanded. The world is approaching a situation where if the government wants a tax it is going to have to beat it out of someone.

[Book]

Nearly all of his argument is based on an assumption that people will pay any tax demanded. The world is approaching a situation where if the government wants a tax it is going to have to beat it out of someone.


The new requirement that Precious Metal Dealers fill out 1099 tax forms for transactions over $600 will be followed. Most here already hand over their Drivers License photo identification when selling coins to the dealer as per police policy.

:oo-->

[Liquid]

The new requirement that Precious Metal Dealers fill out 1099 tax forms for transactions over $600 will be followed. Most here already hand over their Drivers License photo identification when selling coins to the dealer as per police policy.

:oo-->


The more taxes, the bigger the underground economy. It amazes me how stupid the gov is to not realize this. They can attack gold all they want, if it gets to the point where they try and beat it out of us...people will just leave this country. It's like being in an abusive relationship, at some point you just leave.

When I think of gold, I think internationally. It's recognized in every single country as value.

[Ragnarok]

A great quantity of gold left this country shortly before/after Roosevelt's infamous confiscation order. Gold flows toward where its value is appreciated, and away from where it is penalized.

IMHO with the growing unfriendly US position toward PMs via taxation, we are about to see yet another government-inspired expatriation of our real wealth to countries who know what gold can do for their economies if allowed to.

R.

[keehah]

As for cheap transmutation of one element into another, stars are the only option, and for elements heavier than iron you need a supernova. Not exactly a friendly laboratory environment!

2c, R.

Last I checked uranium was heavier than iron. Nuclear bombs are not cheap, but then 'supernovas' are even cheaper. ;)


Rutherford, the British physicist who discovered the nucleus of the atom, had shown in 1919 that you can bombard elements with alpha particles and transmute them. The accepted wisdom of today is exactly the same, except that the physicists have used heavier and heavier "bullets" in their artillery approach. No one has tried a controlled approach, for the catechism is that you have to use the wham it harder! approach.
http://www.youtube.com/watch?v=rCn1oUMbivQ

Heck even chickens can do it. (http://www.cheniere.org/books/aids/ch5.htm) Be the chicken! Make what you need., we don't need to eat the other chicken's eggs. (However I don't deny 'chicken' populations are running amok) ;D
http://www.cheniere.org/books/aids/f72.jpg

[gunDriller]

A great quantity of gold left this country shortly before/after Roosevelt's infamous confiscation order. Gold flows toward where its value is appreciated, and away from where it is penalized.

IMHO with the growing unfriendly US position toward PMs via taxation, we are about to see yet another government-inspired expatriation of our real wealth to countries who know what gold can do for their economies if allowed to.

good point.

but, if they have capital controls at the border, people will have to get ... creative. ;)

[cedarchopper]

A great quantity of gold left this country shortly before/after Roosevelt's infamous confiscation order. Gold flows toward where its value is appreciated, and away from where it is penalized.

IMHO with the growing unfriendly US position toward PMs via taxation, we are about to see yet another government-inspired expatriation of our real wealth to countries who know what gold can do for their economies if allowed to.

good point.

but, if they have capital controls at the border, people will have to get ... creative. ;)


And educated.

Started a thread on this topic, but a copy belongs here. Did you know that you had to declare $2500. worth of gold or silver when leaving the country or risk confiscation? I didn't.

http://www.cbp.gov/xp/cgov/newsroom/news_releases/archives/may_2010/05312010_2.xml

snip- In nine separate instances, CBP officers seized currency from travelers departing the U.S. without declaring actual amounts even when asked directly. Officers discovered undeclared currency stuffed in envelopes, in pockets or carry-on bags and, in one instance, the currency was sewn into the traveler’s boxer shorts.

Officers seized one bar of gold, two silver bullion bars and three bottles of gold nuggets because travelers failed to file a shipper’s export declaration. This automated declaration is required when transporting a commodity out of the country valued at least $2,500. Failure to file a shipper’s export declaration can result in the commodity’s seizure.

[JohnQPublic]

As for cheap transmutation of one element into another, stars are the only option, and for elements heavier than iron you need a supernova. Not exactly a friendly laboratory environment!

2c, R.

Last I checked uranium was heavier than iron. Nuclear bombs are not cheap, but then 'supernovas' are even cheaper. ;)


Rutherford, the British physicist who discovered the nucleus of the atom, had shown in 1919 that you can bombard elements with alpha particles and transmute them. The accepted wisdom of today is exactly the same, except that the physicists have used heavier and heavier "bullets" in their artillery approach. No one has tried a controlled approach, for the catechism is that you have to use the wham it harder! approach.
http://www.youtube.com/watch?v=rCn1oUMbivQ

Heck even chickens can do it. (http://www.cheniere.org/books/aids/ch5.htm) Be the chicken! Make what you need., we don't need to eat the other chicken's eggs. (However I don't deny 'chicken' populations are running amok) ;D
http://www.cheniere.org/books/aids/f72.jpg





No problem. When you check you gold coins, weight them, check thickness and diameter, then pass them by a Geiger counter.