stop the presses! karl denniger discovers ka-poom theory!

[Chris]

Re: stop the presses! karl denniger discovers ka-poom theory!

quick point: David Goldman is a deflationist - and you can read more of his economic work at the Asia Times.

[raja]

Re: stop the presses! karl denniger discovers ka-poom theory!

It will gain improvement of their reserves required by the new international currency system (i.e. they will refill Fort Knox with gold). In 1998 South Korea asked its citizens to donate gold to help repay IMF loans. US will do the same, but this "donation" will be forced.

Obviously, taxes on gold sales will go up very fast. They are already much higher, than regular capital gain tax. Also, regulation fanatics will add more and more new and complicated rules to any profitable PM/commodities trade. Eventually (already?) this tax system will become so twisted and insane (e.g. reqirement to pay taxes on gold in gold), that no normal person will be able to comply with it. In other words, any gold owner will always be at risk of violating this or that moronic rule or missing some idiotic tax. The media will write articles about "hoarders" making insane profits while “poor” people lose their homes. The gold trade will mostly happen in the black market. The gov’t will catch and punish people doing “big” trades and make example out of them. The “little” people will finally realize, resistance is futile and exchange their gold for gov’t bonds via some “amnesty” program.

You just read one ;)

Medved,

Thanks very much for sharing your insights.

On a website that "recommends" a 30%-gold allocation (iTulip), one would expect a lot more discussion in reaction to your comments . . . perhaps even a comment from EJ or Fred. I hope that will follow . . . .

When I asked about a warning, what I was getting at is whether you think there will be sudden gold legislation that renders gold profits impossible or greatly reduced, occuring so quickly that even informed gold holders don't have time to bail out. But you seem to be saying that you expect a slow degradation implemented through growth of profit-stealing regulation. Am I reading that right?

I, and perhaps many members of this website, expect that gold will rise, and at some stage reach a mania in which many late-comers will pile in . . . at that point it's time to sell gold. Do you expect such a pattern -- and profits to be had thereby -- or do you think the government will somehow interfere with that scenario?

[medved]

Re: stop the presses! karl denniger discovers ka-poom theory!

Medved,

Thanks very much for sharing your insights.

On a website that "recommends" a 30%-gold allocation (iTulip), one would expect a lot more discussion in reaction to your comments . . . perhaps even a comment from EJ or Fred. I hope that will follow . . . .

I am not sure they should be concerned about it. All this is just speculation anyway.

OTOH, pay attention, they recommend *physical* gold, not ETFs or gold certificates. It means, they expect the official markets to fail. Try to imagine the situation, where official trading vehicles don’t exist… I leave the rest to your imagination….

When I asked about a warning, what I was getting at is whether you think there will be sudden gold legislation that renders gold profits impossible or greatly reduced, occuring so quickly that even informed gold holders don't have time to bail out. But you seem to be saying that you expect a slow degradation implemented through growth of profit-stealing regulation. Am I reading that right?

Yes, this is my opinion. We are on the road to slavery, and we already made a lot of important steps towards it. So far everything developed gradualy, the gov’t has much more power and people accept it. It is much easier to increase taxes on gold from 28% to 60% (and if this works, why not 90%?), than do outright confiscation. Who cares about it except hoarders, terrorists, gold bugs, tinfoil hats, libertarians and other nutcakes?

I, and perhaps many members of this website, expect that gold will rise, and at some stage reach a mania in which many late-comers will pile in . . . at that point it's time to sell gold. Do you expect such a pattern -- and profits to be had thereby -- or do you think the government will somehow interfere with that scenario?

It will definitely interfere. The gold bubble is a “bad” bubble unlike hi-tech or real estate. Look how they reacted to the sudden rise in oil price. The same will happen with gold (times ten). Besides, the gov't will badly need some tax revenue to support its continuing struggle for the Good Of The People. This way or that way it will tap whatever profitable activity still exists.