iTulip endorses the Fair Treatment for Precious Metals Investors Act

[rogermexico]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

And I must add, my proposals for The Capital Spillway Trust do not in any way involve the use of government, funding or input. The entire exercise must be driven from the private sector.

That is the part that makes no sense to me. How can a voluntary private sector program possible compete with armed to the teeth money printing, favor granting government-sponsored FIRE ? Compete in any legal and truly effective fashion, I mean. Not some quixotic demonstration project. For real.

[flintlock]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

To make job creation attractive requires sound money (implies sound fiscal policy), a rock solid stable and extremely minimal regulatory environment, and at least predictable if not de minimus, tax rates. We have none of these now. That is all we need. No government "help" other than getting the hell out of the way and enforcing laws prohibiting fraud and theft is required.

Exactly. And why so many don't get this is a mystery to me. You don't need a thousand bureaucracies in order to enforce the law. Just the will to do so.

[rogermexico]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

"Reigning in the ability to create unlimited credit..."

It seems even Mervyn King, head of the BOE, thinks this might be at the root of the problem as well.

From this link at zero hedge:

As the BBC noted last week:

Mervyn King, the governor of the Bank of England, has tonight made a big intervention into the debate on banking reform. In a speech at Buttonwood, New York, he[listed] much more radical proposals.

1. Forcing the riskiest banks to hold capital "several times the magnitude" of requirements at present.
2. The Volcker rule-style enforced breakup of banks into speculative and non-speculative arms.
3. The "Kotlikoff proposal", which forces banks to match each pool of risks with a requisite amount of capital, preventing losses in one spilling over into another.
4. Stunningly, Mervyn King imagines the "abolition of fractional reserve banking":

"Eliminating fractional reserve banking explicitly recognises that the pretence that risk-free deposits can be supported by risky assets is alchemy. If there is a need for genuinely safe deposits the only way they can be provided, while ensuring costs and benefits are fully aligned, is to insist such deposits do not co-exist with risky assets."

http://www.zerohedge.com/article/ban...eserve-banking

Bernanke's UK counterpart entertains the ideas of Von Mises and Rothbard?

There may be a shred of hope after all.

[Chris Coles]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

That is the part that makes no sense to me. How can a voluntary private sector program possible compete with armed to the teeth money printing, favor granting government-sponsored FIRE ? Compete in any legal and truly effective fashion, I mean. Not some quixotic demonstration project. For real.

You forget your own history. What I am proposing was implemented by the United States at the end of WW2, it was called the Marshall Plan.

Belgian economic historian Herman Van der Wee concludes the Marshall Plan was a "great success":

"It gave a new impetus to reconstruction in Western Europe and made a decisive contribution to the renewal of the transport system, the modernization of industrial and agricultural equipment, the resumption of normal production, the raising of productivity, and the facilitating of intra-European trade."^[8]

http://en.wikipedia.org/wiki/Marshall_Plan

What all of you forget is the FIRE economy is driven by trading in companies. Those of us determined not to be traded as though slaves to be bought and sold at the local market cannot get access to capital. The very thing you all claim to rail against, the FIRE economy, is exactly what you are all carried away in doing every day; trading stock.

You gave Germany the economy it enjoys where everyone that could create a business was given the capital to create one.

Since the 1970's there are millions of us that have consistently refused to be treated as slaves. PERIOD. Millions of us. But you have closed your eyes to the reality and constantly invoked the claim that there is plenty of capital available while millions of your citizens live desperate lives below the waterline. The reason being they do not have access to capital. They refused to accept the poor product on offer; slavery!

Buying and selling companies is the root cause of ALL the FIRE economy problems.

What I am proposing is simply an exercise to remove a large quantity of almost worthless paper assets from the existing FIRE economy, (they will evaporate anyway due to their poor quality), and place them, as equity capital and working capital, back into productive use to create new jobs. Yes, under a system you find very difficult to understand - Free Enterprise, where the manager of the business owns the business. Where their company cannot be sold out from under them as soon as it becomes profitable, where multi-national companies cannot buy them to cover up their own mistakes; where the owner takes full responsibility for their local community to employ their people, not some cheap labour in another nation.

So what is YOUR difficulty with that idea?

You claim to live in a free nation yet remain wedded to the idea that no one may own their own destiny.

The utter stupidity that we cannot be both free and successful.

You need to take a walk through some of the most disadvantaged cities in your nation and look at what your FIRE economic model has brought your fellow citizens.

Wake up and smell the coffee; your product stinks and is almost unsellable. Your economic model has collapsed and it is someone else's problem, - nothing to do with me Gov, it fell of the back of someone else's lorry.

Bah! Humbug!

[DSpencer]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

What I am proposing is simply an exercise to remove a large quantity of almost worthless paper assets from the existing FIRE economy, (they will evaporate anyway due to their poor quality), and place them, as equity capital and working capital, back into productive use to create new jobs. Yes, under a system you find very difficult to understand - Free Enterprise

Chris,

While the first part of this paragraph is vague, it strongly implies some kind of statist, centrally-planned, anti-free enterprise government action that takes someone's assets and gives them to somebody else. If I'm wrong, please clarify. If not, how can you possibly follow that sentence with one about how others don't understand free enterprise?

This sounds like a George "abandon free market principles to save the free market" Bush plan: centrally plan the economy to make free enterprise work.

You're arguing with rogermexico as if he made any kind of anti-free enterprise comment. I don't want to speak for others, but I believe he's laying out a plan that would accomplish the same goals that you desire. Here's my version that's probably very close to his:

1. For a variety of reasons the government has structured the laws so that investment capital flows into the FIRE economy and away from the productive economy and in particular away from small businesses.
2. The government has also structured the laws so that large, politically connected corporations have a competitive advantage over small, honest businesses. This further enhances the effect of #1.
3. The result is that, compared to a more free economy, more capital is invested in the FIRE economy compared to the rest of the economy.

The problem is NOT:

1. Lack of investment capital
2. Lack of proper investment funds, trusts etc.
3. Fundamental lack of investor desire to invest in small productive businesses

The solution therefore is not to forcefully direct funds into one area or another of the economy.

The solution is to actually have a free market/free enterprise by removing the government interventions that led to the FIRE bubble. To truly understand free enterprise means that you understand that it will automatically develop a near optimal solution to the allocation of capital.

As someone with even a modest amount of capital to invest, it's absolutely infuriating to live through this time period. The government tries like hell to force you into investing in it's partner, big business. If you manage to get lucky with their investments, they tax your money again. If you stomp your feet and insist on trying to just sit this time out with gold/silver then they tax you even higher.

Trust me - people have money and desperately want to invest it in real productive businesses. It's just extremely challenging in a world where government decides who wins and who loses. Who's going to invest in a U.S. small business knowing that all it takes is for one stroke of a government pen to close it down? Interstate commerce clause modern interpretation = government controls all commerce.

[DSpencer]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

In the meantime, surely there is no reason why anyone cannot exchange their Gold as a bulk commodity for Gold coins and then, instead of selling them, simply remove them from storage and use them as currency? What would the tax implications be if, instead of selling the Gold for profit, producing a capital gain, you use them to purchase whatever you need at the time?

This is an interesting thought. In the US, you could (foolishly) use american eagles to buy things at face value. Could someone sell me a used car for 500 dollars if I paid in $50 one ounce gold eagles? Would I report a capital loss? Would the gold eagles cease to be an investment? What would I pay sales tax on?

I guess the bottom line is it's just another honor system and if it was ever reviewed the IRS would say it's tax evasion and you'd lose. This is just another bizarre scenario created by legal tender laws that are only enforced in the government's favor.

[ThePythonicCow]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

all it takes is for one stroke of a government pen to close it down? Interstate commerce clause modern interpretation = government controls all commerce.

Careful there, DSpencer.

By writing an interesting, coherent, multi-paragraph blog posting, you have delayed my trip to the local mall a couple of minutes, thus delaying my next purchase. This affected inter-state commerce.

Is that a SWAT team outside your window?

[Chris Coles]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Chris,

While the first part of this paragraph is vague, it strongly implies some kind of statist, centrally-planned, anti-free enterprise government action that takes someone's assets and gives them to somebody else. If I'm wrong, please clarify. If not, how can you possibly follow that sentence with one about how others don't understand free enterprise?

First of all an apology to Rogermexico, it is true to admit I got a little hot under the collar this morning. I apologise. But that in turn gave me a better insight to my own thinking. (Nothing like rolling straight out of bed and blowing off a little steam to get a better handle on a debate). To answer your immediate question above; this is not any form of statist, anti free enterprise centrally-planned government mechanism. Instead, I believe that I am debating how to access a market for investment that has been known about for a long time, but no one seems to have been able to create a worthwhile mechanism to access it. Free Enterprise, where the manager of the business owns the business. My hesitant first steps, (and the odd stumble), are a debate about how to make this new market work for the long term benefit of everyone. Please bear with me while I explain.

There are two separate banking systems today, one is the visible banking and investment system, closely linked to government; the other curiously titled: Shadow Banking. I believe that the shadow banking system holds a potential answer to our problems. As I see it, shadow banking entails all the off (conventional banking system) balance sheet assets in the form of a bewildering variety of bonds and securities such as CDO’s etc. etc.; much of which is what we on the outside have described as vapourware. By the same token, I also suspect that　they would agree with that analysis...... but it sits there on their balance sheets and is accounted for. But now look at this from another viewpoint; the shadow banking industry must be as deeply affected as we are with the ongoing instability of the visible financial system. That the truth is they too want the nation to succeed and they too wish for more prosperity right across the nation - for that prosperity underpins their own potential for success.
　
What I am suggesting is that they should also recognise the need to re-introduce new prosperity back into the nation, but dislike, (as we all do here on iTulip), any idea of the government becoming involved. So what I have proposed is the creation of a massive fund of what I describe as Vanishing Bonds. I propose that the shadow banking system take their, (shall we say, less than perfect paper assets); and convert them into a new form of bond that is specifically designed to transfer, over the long term, prosperity back into the grass roots of the nation, any nation.

I have already proposed for example here in the UK we create a £450 billion Vanishing Bond Fund with the aiming point of financing the creation of 6 million private sector jobs on free enterprise terms. By the same token, if the US needs 30 million new jobs, then the US fund needs to be in the region of $3 Trillion.

My proposal identifies the existence of a new market for investment and I believe that I have devised a completely new set of rules to address that market. That by taking the value of rubbish assets and converting them to vanishing bonds, we can use these new bonds as value within the outer, conventional　banking system, but now as new equity capital and working capital investment into new job creation under free enterprise terms.

So this is not any form of statist, centrally planned mechanism. It is instead, a completely new form of financial institution. I call it The Capital Spillway Trust. Local job creation for the people, managed by the people.

The underlying principle is to change the mindset of local community investment from one where one seeks to find a business prospect that may be turned over and sold on, traded, ASAP for M&A; to one where the recipient is left in total control of their own business and the fund has every intention of remaining at arms length to permit them every chance to reach stability. And to do that both sides have to accept new rules.

The investor has to become a part of a local community of savers where everyone takes risk and reward equally to spread the risk; with the long term aim of increasing the local community prosperity; while, at the same time, accepting that the recipient of the investment is left free. To achieve that, the investor must change their source of income from one stemming from a trading function to one of a long term dividend function. Their investment income stems from dividends, not trading.

By the same token, the new business founder has to accept severe constraints upon their reward; both short term and long, to ensure the long term investors gain an acceptable income for their input; while also taking much greater responsibility for everyone in their local communities. They are, after all, the source of the future prosperity for everyone, both their investors as well as their employees.

When you come down to it, today, everyone sees investment as something…. What did you call it? "action that takes someone's assets and gives them to somebody else" But surely that is EXACTLY how classic Capitalism should function? You give equity capital and receive dividend income. Classic equity capital investment is surely about retaining prosperity within a local community; not about selling that prosperity to another nation?

Please think about that?

The Capital Spillway Trust response to the Green Paper; Financing a Private Sector Recovery was placed up on iTulip for ongoing debate here: http://www.itulip.com/forums/showthr...ector-recovery

Some very salient points

The new business will only require the founders pay the initial costs of forming the company and producing a viable business plan. This will be a once in a lifetime opportunity.

You will hang, right out in full view; the potential for ANYONE with get up and go, to create a profitable, free enterprise based, private sector, job creating business for themselves.

Not a single penny of their existing savings risked by anyone.

Not a single penny invested without a new job being created.

Not a single penny spent by any government employee; all the money goes directly into new, free enterprise based, private sector job creation, right at the grass roots of the nation.

The necessary legal and accounting framework is already in place in each local community.

The clear potential for a massive reduction in welfare costs allied to a corresponding increase in tax income. Perhaps for the first time in generations, the government’s books will balance.

[Chris Coles]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

This is an interesting thought. In the US, you could (foolishly) use american eagles to buy things at face value. Could someone sell me a used car for 500 dollars if I paid in $50 one ounce gold eagles? Would I report a capital loss? Would the gold eagles cease to be an investment? What would I pay sales tax on?

I guess the bottom line is it's just another honor system and if it was ever reviewed the IRS would say it's tax evasion and you'd lose. This is just another bizarre scenario created by legal tender laws that are only enforced in the government's favor.

To clarify, I meant to say use the Gold coins at their full value, not their face value.

[DSpencer]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Careful there, DSpencer.

By writing an interesting, coherent, multi-paragraph blog posting, you have delayed my trip to the local mall a couple of minutes, thus delaying my next purchase. This affected inter-state commerce.

Is that a SWAT team outside your window?

Lucky for me, my office doesn't have a window!

Just to be sure I don't offend the interstate commerce gods I'll go home and burn my garden and board up my fireplace so that I don't interfere with the agriculture and gas heating industries.

[Chris Coles]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Now I get it, all this humour is because of the election tomorrow. No!

[DSpencer]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

This debate is pretty off topic so I'll try to swing it back around...

From this thread:

And I must add, my proposals for The Capital Spillway Trust do not in any way involve the use of government, funding or input. The entire exercise must be driven from the private sector.

From your other thread you mentioned:

I propose the Bank of England create a completely new capital bond; a Vanishing Bond.

The Bank of England should immediately create and make available, as a national fund, £450B of new Vanishing Bonds at zero. 0%

I don't want to be rude, but at this point I have to believe this whole idea is a test designed to see how much people will debate a silly idea full of grandiose goals and complete nonsense as content.

How is the Bank of England, the CENTRAL BANK, implementing a PLAN to do X, Y and Z in order to fix A, B and C not central planning?

The absurdity of "vanishing bonds" being given to anyone who can scribble out a business plan without risking any of their own money is beyond my comprehension.

You seem like an honest, well-meaning person and I've tried to understand this idea as you've obviously put a lot of thought into it. But all I can conclude is that the end result is a mixture of your personal struggles to get capital investment, a desire to have a brilliant plan that fixes all problems immediately and a scheme so elaborate you've convinced yourself it would work if only someone (in government) would listen. Sorry if that's offensive, but I take offense to this type of plan being labeled as "free enterprise".

If you want free enterprise, the only proper proposal is to eliminate the current barriers to it, i.e. the laws, regulations and excessive taxation that inhibit the free market. In particular laws that make taxes inconsistent and unfair such as the ones that this legislation seeks to (partially) reverse. These laws punish the savers that are the ones behind capital investment.

So in summary....I also endorse the fair treatment for precious metals investors act despite it not going nearly far enough. Gold is money and I don't think it should be taxed at all....aaaand we're back

[Finster]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Considering that gold and silver were supposed to be money themselves, they shouldn't be taxed at all. Did they really go up in value or did your dollars go down?

At least putting them on the same footing as stocks would be a step in the right direction. Aside from being more fair, it would simplify taxes as well. The IRS considers ETFs like IAU and SLV to be "collectibles" like the metals themselves for determining your tax obligation, but because they are really funds, your 1099 comes adorned with numerous small phantom transactions at the end of each month when you neither bought, nor sold, nor received a distribution. What a mess!

Yes, let’s please fix this now!

[Chris Coles]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

This debate is pretty off topic so I'll try to swing it back around...

From this thread:


From your other thread you mentioned:
I don't want to be rude, but at this point I have to believe this whole idea is a test designed to see how much people will debate a silly idea full of grandiose goals and complete nonsense as content.

How is the Bank of England, the CENTRAL BANK, implementing a PLAN to do X, Y and Z in order to fix A, B and C not central planning?

The absurdity of "vanishing bonds" being given to anyone who can scribble out a business plan without risking any of their own money is beyond my comprehension.

You seem like an honest, well-meaning person and I've tried to understand this idea as you've obviously put a lot of thought into it. But all I can conclude is that the end result is a mixture of your personal struggles to get capital investment, a desire to have a brilliant plan that fixes all problems immediately and a scheme so elaborate you've convinced yourself it would work if only someone (in government) would listen. Sorry if that's offensive, but I take offense to this type of plan being labeled as "free enterprise".

If you want free enterprise, the only proper proposal is to eliminate the current barriers to it, i.e. the laws, regulations and excessive taxation that inhibit the free market. In particular laws that make taxes inconsistent and unfair such as the ones that this legislation seeks to (partially) reverse. These laws punish the savers that are the ones behind capital investment.

So in summary....I also endorse the fair treatment for precious metals investors act despite it not going nearly far enough. Gold is money and I don't think it should be taxed at all....aaaand we're back

At first sight I should run and hide; but along the road I set out upon over the last few decades I came across a simple fact that, today, is not in dispute.

There is NO accepted mechanism for the investment of equity capital under free enterprise terms ... anywhere. The Governors office of the bank of England says they "fully understand the need for equity". .... but ..."are unable to help".

If you turn to the present and look in detail at Quantitive Easing, (QE), you will see all central banks passing out vast sums of money, hundreds of billions no less, in various forms not familiar on the high street, to the existing banking industry and an ongoing discussion about how to continue to "prop" up the present financial system. The expectation is, without further QE, the Western economies will fall back into a second phase reversal.

So there is a general recognition that there is a need to find a road out of the mess we are all in; which in turn prompted Mervyn King to state, publicly, the need for a detailed plan. It was in response to that public request that I came up with the idea of first of all asking the Bank of England for the chance to meet with them to discuss how to raise the funds for such a plan, along the lines I outline with my own thinking about The Capital Spillway Trust. My thinking being that, as we do not have an accepted, agreed by everyone, mechanism to invest equity capital into free enterprise, (everyone thinks we have one, but the truth is we do not have one), then perhaps my own input would have some value.

Not unsurprisingly, they would not meet with me; but it is true to state the dialogue was not entirely negative. I repeat, they fully understand the need for equity.

All my thinking centres upon the simple fact that there is no capacity for investment at the grass roots of the Western nations. There is no spare capital in the form of savings, or spare tax income, or in the form of spare capacity to borrow, neither by government or the ordinary citizen. So the challenge is to think of a method that will both serve as a mechanism for QE, but without the money being automatically distributed back into the existing banking system.

To spur a conversation, I decided to provoke new thinking by devising the idea of a "Vanishing Bond" that will serve as QE, but NOT remain in circulation and even more importantly, not be given to the banks, but instead, would be directed into new job creation. The more I thought about the vanishing bond, the more I saw the chance for the shadow banking system to offload all their dross, of which I am certain, they have a lot on their hands.

The whole idea of the Vanishing Bond is to create a mechanism that simply acts as a transfer mechanism, transferring prosperity presently locked into the shadow banking system, back into the general population, over a period of time, as new prosperity.

If you can tell me of another mechanism that will quickly; NOT over many decades, replenish the missing prosperity at the grass roots of society that is needed to allow the normal process of job creation to re-start..... then tell us all about it.

As an inventor, I have become used to being laughed at; very few can handle the idea of a new way of looking at existing processes; even less can actually accept the changes needed. It is thus very interesting indeed to see that Mervyn King seems to be showing the capacity to also drive forward with new thinking of his own as we can see with his recent speech. http://www.itulip.com/forums/showthr...Again?p=179119

All I have done is provoke a debate about a missing element in the funding of new job creation. Yes, anyone can and may criticise what I am trying to do, or the way I suggest implementing my thinking; but at least I am trying to do something to overcome the problem.

There are conversations ongoing, in the background, relating to the value of some telecom patents that were granted to me that may give me the impetus to show the way forward and the value of my thinking by being able to put my money where my mouth is; so perhaps the questions you raise will be answered sometime soon.

But me; I have a very clear conscience. When I left school at 16 yrs, 1960, there were plenty of jobs, today we see reports like this last night on Channel 4 TV. http://www.channel4.com/programmes/d...es/4od#3136470 Oh! and I challenge you to watch the whole hour without flinching. These kids desperately need jobs now, not government welfare, but local people prepared to work at creating new jobs for the majority. The only thing lacking is the available equity capital; a simple fact the Bank of England agrees with. All I am trying to do is find a workable way forward.

[metalman]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

voted the 1000 times option but that's not it, either... poll needs an infinity option.

bought gold & silver w/itulip & are both up > 5x... if that's manipulation i say... keep up the good work, boys! taxes, on the other hand, will take $4,400 out of every $10,000 of invested principle... or 44%. what do i get if I divide 44% loss to taxation by 5x gains from/despite 'manipulation'?

'losses' due to manipulation... it's a nonsense poll question. the folks who complain about market manipulation aren't buy & hold gold & silver investors... they don't have enough $$$ in either metal to care about taxes... they're trying to make $$$ by trading gold & silver & are pissed off because they stumble onto the wrong side of trades vs the big, bad banksters.