Thursday, July 2, 2009

Capital Gains on Gold

are punitively taxed at a higher rate than stocks or other investment capital gains, as they are treated as "collectibles." This is yet another way the government discourages Gold ownership and forces people to accept their intrinsically worthless paper tickets. Forcing people into the fiat casino so that they can be stripped of the fruits of their labor is the heart of what Gold Versus Paper is against.

A Senator Michael Crapo is sponsoring a new bill to change the capital gains treatment on Gold and other precious metals investments. Gold capital gains are currently taxed at 28% and the bill seeks to lower the capital gains tax rate to 15% as with other long-term (i.e. held for more than 1 year) investments like stocks.

Reducing Gold to "collectible" status is another subtle method the fiat statists use to debase the reputation of Gold. The attempts to demonize, trivialize and de-monetize Gold in a fiat system are paramount to the fiat system's success. Why would anyone accept the paper promises of bureaucrats and/or banksters except under the threat of force (i.e. law) or extreme desperation? Paper tickets that can be created at will with no effort or the truest and longest-standing form of money that has been accepted by humans for thousands of years and cannot be debased by those who run the debt/printing presses? Hmmmm. Tough choice but I think I'll choose Gold for at least a portion of my savings.

As our fiat economic system swings from wildly inflationary times to deflationary busts, only one thing is certain: the swings keep getting wilder and wilder and will continue to do so as long as we remain in a fiat currency system. Through it all, Gold just sits there as an anchor of stability. It won't make you rich other than through perfect timing of your trade(s), but it will protect your savings from the wild swings of the rigged paper casino in which the entire world now finds itself. This is why the Dow to Gold ratio chart looks like an expanding megaphone pattern ever since we handed the debt press keys to the private, for-profit federal reserve corporation.

Just like in a casino, there are some big winners among the patrons, but the owners of the casino (i.e. those who run the fiat debt presses) always come out ahead. By putting some of your money in physical Gold held outside the system, you are siding with the owners of the casino. You see, they hold more Gold than anyone because they know the secret.

And what is that secret? Gold cannot be effectively demonetized by decree for any significant length of time. The cycle of asset inflation has swung back the other way and those who hold the Gold sit patiently like vultures. Once the collapse is complete, they will use their Gold to buy up the assets of the world for pennies on the dollar and start the next round of the game all over again. Those who sit in fiat cash waiting out the debacle should do well unless they pick the wrong paper currency to ride out the storm. Pick the wrong currency and you may lose everything (or at least 30-90% of everything) with the stroke of a government pen.

Gold will retain its value during this collapse. If you think you're smart enough to trade this bear market, I wish you luck (and I'll be trading along side you with a significant portion of my capital). Don't think of Gold as a get rich quick scheme, think of it as the vultures' asset of choice. Be like the casino owners and you're sure to come out on top. Put a portion of your assets into physical Gold and sleep well at night knowing you can never be wiped out.

Risk is high and will remain so for at least the next year. Gold stocks will be the go to speculative asset class for those with a bullish bias but are not immune to steep corrections, whether due to normal bull market resting periods and/or bear market legs down in the general stock markets. Later this summer and fall there will be wonderful buying opportunities in the Gold mining sector.

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