Gold/Silver Risk

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  • Sat, Jan 02, 2016 - 09:28am



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    Gold/Silver Risk

The danger for gold/silver holders as I see it long term is: 1) asymmetric taxation and 2) banning.

Regarding #1, if the government tries to tax gold more than other investments then can this be fought as unconstitutional?

Regarding #2, would the government consider a ban since fiat money rules?  This is not 1933; there is no gold peg today.  

If gold is not pegged to the $, then the government will have a hard time arguing for punishment tax or ban since it does not peg the $ and TPTB have ridiculed holding gold/silver.   All this argues for a strong court case in case either #1 or #2 happen.


  • Sun, Jan 03, 2016 - 10:59am



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I think the whole gold confiscation thing happens only on a re-monetization, combined with missing gold from the Treasury.  If the US needs to replenish its gold supply to back the buck, then all bets are off.  Hoarding gold suddenly becomes unpatriotic – you're a terrorist if you own gold and don't cough it up for the good of the country.

Even owning gold jewelry becomes problematic.

The "windfall profits tax" was levied on US oil production in 1980.  Read the wiki for the justification.  It is illuminating.  Primarily item #1 is relevent to us.

There would be a decent amount of jealousy if a small subset of US citizens reaped massive gains from owning gold, should price jump to $5000 or $10000/oz due to remonetization.  Its never good to be a member of a small, newly-rich group that is seen to benefit while everyone else is suffering.  If you see war coming, you stock up on coffee at $1/pound, and then when war arrives you re-sell coffee for $5/pound, you're suddenly a war profiteer rather than just being foresighted.

The 96th United States Congress was motivated to enact the tax by several factors:

  • The Congress was concerned that the domestic oil industry would reap enormous revenues and profits as a result of the deregulation of price controls to allow domestic oil to reset to world oil price levels. Congress believed that the projected huge redistribution of income from energy consumers to energy producers would not be fair.[1]
  • Congress also felt the industry was not paying its fair share of federal taxes. The oil industry’s low effective income tax rates were due to the availability of two oil industry tax deductions: the percentage depletion allowance, and the provision which permits companies to expense (deduct fully in the initial year) the intangible costs of drilling.[1]
  • In addition, Congress was looking for additional sources of revenue. Between 1961 and 1979, the federal budget was in deficit in every year but one (there was a small surplus in FY1969). The Congress's Joint Committee on Taxation projected the tax would generate, from 1980 to 1990, additional gross revenues of approximately $393 billion.[1]
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