Germany grabs the Gold

[coolhand]

Re: Germany grabs the Gold

Sure thing! Where are you at in OH? I am in NE Ohio.

[coolhand]

Re: Germany grabs the Gold

If this happens, I have the feeling they'll find a way to ban private ownership of gold, or tax the sale of gold at something like 90%. They will not let small gold owners and savers profit from this.

As the worldwide fiat money experiment ends, rather than returning to gold-backed money, I think it more likely that governments will switch to a new all-digital currency, name and value to be determined. Governments and central banks will keep the gold in their vaults, but the average joe and jane will be limited to digital money. I've got nothing to back this theory, it's just a hunch.

Shiny-

Why would they need to confiscate or ban private ownership, or tax at crazy levels?

1st - the only ones who own gold in any real size are the wealthy elite. I am sure I don't need to recap the crisis for you to demonstrate that they don't ever lose.

2nd - why confiscate from "commoners" - when you can buy it from them with fiat at a discount to depressed spot prices at any of the thousands of "We Buy Gold" stands around the US? You ever been in one to see who is selling? I have - it's the same crowd that was buying condos in FL in 2004-05, & telling me about internet stocks in 1999-2000. Here's the real question: WHO IS THE MONEY BEHIND THE "WE BUY GOLD" STANDS? WHERE IS THE GOLD GOING?

3rd - as far as 90% taxes - certainly possible, but again read my point about who actually owns the gold in my 1st point. Additionally, gold is already taxed at 35%, so the gov't would get a windfall no matter what. Further, in the true crisis that is coming, the gov't will want to re-claim the gold by treating it well...treating it badly (confiscation, punitive taxation) will simply drive it underground. Think of it this way. The elite own almost all of the non-central bank owned gold. If the US gov't treats it badly, that gold will quietly make its way to private airports around the US in discrete suitcases, and disappear into foreign vaults forever, where it won't aid the US in getting rid of its crisis.

What the gov't would more likely do is keep the 35% tax as it exists today, but then allow gold holders to get rich to provide the capital to fund the gov't at higher rates & restart the whole cycle. What do i mean? If the US gov't revalues its gold to $20,000/oz, which then allows them to offset current Treasury debt & then take interest rates up to 8% for 10-yr Treasuries, i would happily sell my gold to them & deploy the proceeds in 8-10% Treasuries, b/c at that point the gold would be effectively backing the currency & I would be making 8-10% on a really big #, while my mortgage is locked in 2.5% after taxes...

[shiny!]

Re: Germany grabs the Gold

Shiny-

Why would they need to confiscate or ban private ownership, or tax at crazy levels?

1st - the only ones who own gold in any real size are the wealthy elite. I am sure I don't need to recap the crisis for you to demonstrate that they don't ever lose.

2nd - why confiscate from "commoners" - when you can buy it from them with fiat at a discount to depressed spot prices at any of the thousands of "We Buy Gold" stands around the US? You ever been in one to see who is selling? I have - it's the same crowd that was buying condos in FL in 2004-05, & telling me about internet stocks in 1999-2000. Here's the real question: WHO IS THE MONEY BEHIND THE "WE BUY GOLD" STANDS? WHERE IS THE GOLD GOING?

3rd - as far as 90% taxes - certainly possible, but again read my point about who actually owns the gold in my 1st point. Additionally, gold is already taxed at 35%, so the gov't would get a windfall no matter what. Further, in the true crisis that is coming, the gov't will want to re-claim the gold by treating it well...treating it badly (confiscation, punitive taxation) will simply drive it underground. Think of it this way. The elite own almost all of the non-central bank owned gold. If the US gov't treats it badly, that gold will quietly make its way to private airports around the US in discrete suitcases, and disappear into foreign vaults forever, where it won't aid the US in getting rid of its crisis.

What the gov't would more likely do is keep the 35% tax as it exists today, but then allow gold holders to get rich to provide the capital to fund the gov't at higher rates & restart the whole cycle. What do i mean? If the US gov't revalues its gold to $20,000/oz, which then allows them to offset current Treasury debt & then take interest rates up to 8% for 10-yr Treasuries, i would happily sell my gold to them & deploy the proceeds in 8-10% Treasuries, b/c at that point the gold would be effectively backing the currency & I would be making 8-10% on a really big #, while my mortgage is locked in 2.5% after taxes...

I certainly hope you're right!

[coolhand]

Re: Germany grabs the Gold

I certainly hope you're right!

Me too! Obviously, those thoughts above are all IMO, but the reasoning seems to make sense. Truthfully, I spend more time worried about my 401k & IRAs then i do about my gold.

[shiny!]

Re: Germany grabs the Gold

Me too! Obviously, those thoughts above are all IMO, but the reasoning seems to make sense. Truthfully, I spend more time worried about my 401k & IRAs then i do about my gold.

I see two ways my scenario (and Martin Armstrong's) could play out:

1. The electorate gets so angry at the so-called 1%, the politicians decide to throw the "wealthy gold owners" under the bus to save their own skins.

2. The people who are ever more dependent on the government for their sustenance become angry with "austerity", elect a socialist government to "save" them, and the socialists go after the gold and gold owners.

Your thoughts?

[shiny!]

Re: Germany grabs the Gold

In the meantime, the uber-wealthy will have fled to places like this.

[coolhand]

Re: Germany grabs the Gold

I see two ways my scenario (and Martin Armstrong's) could play out:

1. The electorate gets so angry at the so-called 1%, the politicians decide to throw the "wealthy gold owners" under the bus to save their own skins.

2. The people who are ever more dependent on the government for their sustenance become angry with "austerity", elect a socialist government to "save" them, and the socialists go after the gold and gold owners.

Your thoughts?

I definitely think the electorate will get angry at the so-called 1%. But the # of wealthy gold owners will be about the same size as the # of "wealthy CDS owners" after the last crisis...and there was absolutely no out-cry about that. And like CDS' had to get paid out to keep banks whole, gold prices will have to rise obscenely to keep the gov't in business (ie to prevent USD hyperinflation)...my feeling is the public won't like it, but the gov't will act in its best interest, not the people's, per usual, & if that means a few Americans get obscenely rich as an offshoot, so be it.

We already have a socialist gov't - this yr's presidential election features an encumbent with socialist healthcare policies v. a challenger whose healthcare policies in MA were the model for the encumbent's socialist policies. GW Bush instituted Medicare Part D in 2004 to buy votes...

I just got done reading "Time To Start Thinking" by Edward Luce. I'd highly recommend it. It highlights how dysfunctional Washington is...we already have crippling socialism combined with paralyzing bureaucracy & divisive partisanship...i don't think anyone in the US gets the joke yet that the 800-lb gorilla in the room is currently whispering for those listening, but will be shouting at the top of his lungs IMO within 3 years: There is never any austerity coming anywhere, so the gov't will do globally what it has always done - steal through inflation...but the amount needed to steal is so big that the currencies will break before they can be stretched enough to cover the expenditures...then we hit the reset button & start over...

Our foreign creditors get the joke though...CHinese gold purchases running up 6x YTD v. up 3x last yr...

[shiny!]

Re: Germany grabs the Gold

I definitely think the electorate will get angry at the so-called 1%. But the # of wealthy gold owners will be about the same size as the # of "wealthy CDS owners" after the last crisis...and there was absolutely no out-cry about that. And like CDS' had to get paid out to keep banks whole, gold prices will have to rise obscenely to keep the gov't in business (ie to prevent USD hyperinflation)...my feeling is the public won't like it, but the gov't will act in its best interest, not the people's, per usual, & if that means a few Americans get obscenely rich as an offshoot, so be it.

We already have a socialist gov't - this yr's presidential election features an encumbent with socialist healthcare policies v. a challenger whose healthcare policies in MA were the model for the encumbent's socialist policies. GW Bush instituted Medicare Part D in 2004 to buy votes...

I just got done reading "Time To Start Thinking" by Edward Luce. I'd highly recommend it. It highlights how dysfunctional Washington is...we already have crippling socialism combined with paralyzing bureaucracy & divisive partisanship...i don't think anyone in the US gets the joke yet that the 800-lb gorilla in the room is currently whispering for those listening, but will be shouting at the top of his lungs IMO within 3 years: There is never any austerity coming anywhere, so the gov't will do globally what it has always done - steal through inflation...but the amount needed to steal is so big that the currencies will break before they can be stretched enough to cover the expenditures...then we hit the reset button & start over...

Our foreign creditors get the joke though...CHinese gold purchases running up 6x YTD v. up 3x last yr...

Oh, I agree with you that we have a socialist government, but it pretends to be otherwise. In my scenario the gloves will come off and they'll stop pretending.

We are in uncharted waters but human nature remains the same. It stinks.

[charliebrown]

Re: Germany grabs the Gold

At today's gold prices and the level of indebtedness, in the grand scheme of thing, 280 tons is peanuts. 280 tons is what, 20B euros? Didn't Spain just need 100B to recap its banks???