The Gubmint owns your gold

At least we're now getting down to what the real function of our gubmint is ... to steal our wealth.

It also puts the spotlight on CGT on bullion - unadulterated theft!

 

Bron, please don't take this the wrong way, but are you mental? Who in their right mind is going to admit to the government to making such large "profits" when the government is intent on stealing wealth at the time this all happens? They aren't really profits are they? Just some are having their a$$es handed to them a bit less as you so eloquently pointed out with the inflation adjusted figures.

Those staying under the radar and buying in less than 5k lots ATM and stacking large quantities of PM (not in allocated but physical in possession) are going to do very well off in the future...... I guess it's really how long they have to wait?

 

^^ I would have thought there's a heap that is in SMSF and/or reportable allocated gold holdings (such as the Perth Mint ones) which will be covered by Bron's confiscation by inflation.

My/Yippe's issue is whether relying on that alone will be enough to actually underpin a return to a gold standard - hence the rapid confiscation (including effective nationalisation) issue/question.

 

Yeh I get that part, but surely SMSF's are not holdinging large chunks of gold and silver. This would be really a non issue as they are taxed at different/flat rates yes?

Also to use a linear ratio between asset prices of PM's and inflation is not a fair comparison. Anything that sees the RBA needing to confiscate gold to "protect the currency" is going to be reactionary to the masses flocking to it to protect themselves.....albeit far too late.

Like I was getting at with my "nationalise" thread about the RBA simply printing to buy up national production instead of allowing the banks to have first bite of the currency value cherry.....if inflation is Hyper or even 10% ++++, the RBA will have already screwed down the banks to stop it getting worse before this act gets unsuspended.

 

Yeah, I got a very surreal experience while reading many of these posts. This is what we call a free country?

 

Thanks for the heads up. I seem to have missed that thread when it was running. http://forums.silverstackers.com/message-365363.html#p365363

I'll have to read that in more detail but it looks like you had a lot of frustrating unnecessary tangents to your question (very strange as that happens very rarely on here )

As I started pondering in earlier post, I wondering if there's a significant difference to being the first mover back to a gold*** and Australia rebuilding its gold holdings compared to if we are a 2nd mover to the US$ or Euro. If we are a "second mover" then will there be a massive scramble for gold in as short a time as possible? Hence risk of true confiscation. Or, is there still a feasible transition path of some kind without resorting to outright confiscation?

As is estimated in this thread http://forums.silverstackers.com/topic-30430-how-to-return-to-a-gold-standard-sound-money.html gold should be repriced at somewhere around $10,000/oz for the US to return to the gold standard. If they do this first, then presumably the A$ will experience significant exchange rate movements, but will our gold exporting status (linked with A$ being needed domestically) provide some sort of a natural purchasing power hedge for the fiat A$? Hence, is it possible that the A$ even if not explicitly backed by gold will be backed by gold by proxy? These are new questions in my mind so I don't even know the sign let alone the magnitude of some of these random impacts.




*** A true gold standard A$ is of course only a 2nd best option to free money but that's even more unlikely for many years.

 

I think the first mover thing is only valid when currencies as a whole become so bad that people are rejecting them outright and clamouring for stability (gold). While ever the currencies have some degree of stability, as they do now, moving to gold would only result in deflation and export businesses would struggle,etc, similar to what is currently happening in Greece, Spain, etc...

 

Hmm, assuming I'm interpreting correctly, you're saying it will probably be G7 or G20 group of countries who sign up together rather than a particular individual economy resetting (probably after Wiemar-style collapse). I think this has strong merit for many reasons.

But if everyone moves together but everyone has different holdings per fiat$ that should mean either there is (1) a large movement of wealth on the paper accounts to transfer ownership in an upfront lump (preferable) or (2) there will be large relative changes in currencies based on which countries happen to be holding gold at the time (including confiscatable gold)?

 

Newbie question? In order for any nation to return to a gold standard, wouldn't gold and or silver have to have a fixed price on a global scale. If not, a country could see all of its wealth going overseas in a very short period of time, especially if the people you are indebted to call in your debt on a gold downturn. You would pay more gold and they make huge profits on the upswing.

Also, what nations could afford to go to a gold standard without other nations doing so? Maybe the U.S. back in the old days but who is left to break the ice? China, the EU? Even then they would have to economically force other nations to follow the trend, they couldn't supply gold to the rest of the world for trade without the hope of getting some in return.

 

Hey mel im pretty sure the price of silver & gold is a fixed price around the globe . Its called the spot price

 

No. Australia (or any country) could in theory go it alone. The main issue is the political will in the near term would have to be enormous as for many countries (including Australia) there would be far more structural adjustment required compared to if most of the western world went together. In terms of magnitude the top fifteen economies comprise three-quarters of the global economy, with the top 5 equal to nearly half (namely, 1. USA, 2. China, 3. Japan, 4. Germany, 5. France, Brazil, UK, Italy, Russia, 10. Canada, India, 12. Australia, Spain, Mexico, 15. S. Korea).

USA is still the biggest gorilla who can effectively pull the rest of world into line with the EU as a collective being the other possible.


Edit: And reno the spot price is irrelevant when we are talking about a gold standard as we are in this thread.

 

I don't think the EU as a collective is going to be feasible. In fact, I think the Euro was the trial run for the global currency run by a global central bank. It was a failure. Obviously, it's not going to work and everyone knows it.

But there still needs to be a global currency. And society is moving towards a cashless society.

At this point there are no free market solutions to fill the gap (although I think Bitcoin may be a glimpse of the future), so we are going to limp along with the US dollar, which may be turned back to Gold at some point, until better solutions come along. But there is certainly a huge gap in the market at the moment and most attempts to fill it have ended up with the owners heading to jail because the US Govt is scared stiff of losing it's power.

 

There are many possible futures where this can all play out. Even though the USA is a clear candidate because of its reserve currency status an alternative sound currency may happen BECAUSE of this. Hence the EU may actually be first to move because it needs to and because China et al are crying out for an alternative. Unknowable of course but I'm thinking us stackers should have more experts on this whole issue than we seem to have.


Edit: And I agree about your 'trial run' comment. As you know can't have sound money AND central banks. But central banks are now considered normal and worthwhile by the average person.

 

The thing that the EU demonstrated though is that you need to have a political compact in order for the centrally planned currency to work.

So, logically if you need a global currency, which we do, then the obvious conclusion, under the current paradigm, is world government.

Except, I just don't see any way that it can be made possible at this point. In fact, the world is heading in the opposite direction, decentralization, with the central planners desperately trying to hold on to their power, but slowly, relentlessly, failing.

So, the way I am thinking is if you had some sort of voluntary global standard for currency, through ISO maybe, and then you might have competing currencies that follow the standard, in a similar way that web browsers implement their own standard of HTML which to lesser or greater degrees follow the standard. It's the way most other markets works, there are all kinds of global, voluntary standards for just about whatever product you can think of.

EDIT: and hey, we're all experts here. It's fun to talk about and discuss, for me anyway, but I'm weird like that.

 

100% agree with where we need to end up but am really, REALLY worried that the death throes will be very painful with an intermediate period of pseudo-sound currency during which time there is the high risk of gold confiscation.

I guess I can see a clear path back to Bretton Woods style money system (without a complete meltdown being necessary in the interim) but much harder to see move to true sound money without a complete meltdown.

I know which end game I prefer, but I also know which incremental progression I (think I) would prefer.

 

In short no. The price of gold is not fixed nor could it ever be or ever has been in reality in the past. The only thing that could be fixed is the amount of dollars/Euro/USD/Renminbi in circulation locking to the gold. Same thing you may say? Not really. Imagine Australia revalued gold to $100k per ounce and this represented all the gold the RBA had in the vault to the amount of AUD in circulation. If fractional reserve banking remained and the actual ratio of AUD in circulation began to blow out compared to RBA holdings of gold,no one would touch the AUD for trading or for gold exchanges. Saying you are on a true 100% backed gold standard and actually being on one is a whole lot different.

 

I think quite the opposite actually. You could never have a true gold standard without central banks.... Or at least them policing it.without the threat of force on behalf of the government the banksters would run riot just like they have always done in attempting to cheat gold.

What you can't have is fractional reserve banking and sound money living side by side.... They are polar opposites.

 

So basically they tax us on every dollar earned, no gst on bullion thank god, then they tax you on the capital gains (therefore buying solid gold at a cheaper rate than the rest of the world, excluding other governments), then screw you with inflation?


Once they take everything we own, what then?

 

I think it is the other way round. You can't have extensive FRB without central banks and their coercive power. Sound money should happen naturally through simple market forces. Rothbard and others have written a fair bit about this point. With free money, Gresham's Law will hold whereby good money will drive out the bad. The incentive to ensure that your mint/bank or whatever is the good money combined with wanting to take market share from competitors will self correct anyone trying debasement or FRB fraud.