GOLDBUG: Speculating about gold confiscation is asking the wrong question

Wednesday, July 7, 2010

http://www.silvermonthly.com/195/government-confiscation-gold-happened-beforecould-happen/

Government Confiscation of Gold: It Happened Before — Could It Happen Again?
by: J.D. Seagraves

*** begin quote ***

Although the U.S. dollar is constantly under pressure, the U.S. government continues to stockpile debt, and impossible-to-fulfill entitlement commitments loom on the horizon, the idea that the U.S. government would try to confiscate citizens’ gold today or anytime in the foreseeable future certainly seems spurious at best. After all, the government did so in the past in order to recalibrate the gold standard, which we have not been on since 1972.

However, our government has become increasingly bold in its refusal to be restrained by the Constitution, and following the return to limited government (at least in rhetoric) by the Reagan administration in the eighties, the Constitution has been all but ignored by subsequent administrations and congresses.

*** end quote ***

Sorry, but that is absolutely the wrong question.

Yes! With Gooferment debt as far as the eye can see. And “unfunded liabilities” that even scare politicians and bureaucrats abound. (Not for the reasons you think; they are worried how they are going to collect! Did you forget the three “laws” of policial behavior again? Remember the three “laws” of political motivation: (1) reward your friends; (2) punish your enemies; and (3) feather your own nest.)

So with this “crisis” looming, the popular tin foil hat worry is “gold confiscation”. Sorry, but that won’t help the politicians and bureaucrats through this crisis. Last time, it was easy and there was enough wealth that could be stolen to make it worth their while. This time, not as many people own gold, they don’t old anywhere near as much of it, those that do own gold also own guns, the population isn’t as docile and complaint as back then, and the We, The People are aroused and as irritable as a cranky tired child .

No, there will be no “FDR-style gold confiscation” because, pure and simple, it can’t give the politicians and bureaucrats enough wealth to pay their own pensions. Or, even allow them to buy enough votes to get reelected. That’s what the “crisis” is all about.

I think the correct question is “what WILL they seize that can end the crisis?”. That’s the question.

The only pot big enough is the 401k / IRA wealth save by Americans for their retirement and held by a small number of “custodians”. 13T$! Sticking there waiting to be stolen.

That will be their target.

Of course, it will have to be done: “to save the children”. In this case, it’ll be the “child-like investor” who will be deemed to need their “retirements” protected from the inability of Wall Street to be honest and to generate the returns necessary for a “safe and secure” retirement. And, of course, the “crisis”, the American version of the “Reichstag fire”, will be to “save Social Security, Medicare, and the Drug Benefit”. There have to be some “poor children” in there somewhere.

Think back when Bush supposedly wanted to “privatize” Social Security. (Like that was going to ever happen. It sent the message that “you victims have been getting screwed big time” and now were going to “allow you to be screwed a little less”. It said sotto voce that maybe you the individual didn’t need the wise old Gooferment to plan your retirement!) Remember how the politicians and bureaucrats screamed that the Stock Market was “unsafe”. (Yeah, like getting a negative 3 per cent return on your “Social Security” investment was safe. Or, that depending upon Gooferment not to change the rules on “Social Security” again. Remember it was never going to be taxable. It was never to be changed. It was the supposed “third rail” of politics. It was “retirement insurance”)

Get ready for a large dose of propaganda!

I suspect the argument will run concurrently along several lines: “Save Social Security for Future Generations”, “Save your Social Security from the Boomer shift”, “No Social Security for the Wealthy”, “IRAs and 401ks are not ‘safe’ in the Markets”, “It’s not fair to poor people who couldn’t save”, and “The Gooferment gave you a tax break so some or all of it is theirs”. Argh!

When the Gooferment first created IRAs in my early days, I didn’t go into one because I was concerned about them changing the rules on them. If we had blogs back then, I’d have ranted about them. Eventually my then accountant, (I’ve gone through several since then), convinced me to “take the tax deduction”. It meant I paid less taxes out of my own pocket and had this pot of money, that I couldn’t touch until I was old, over on the side. Eventually, I thought this was how they were going to get out of the Social Security “problem”. (Little did I know then!) But I was concerned then about taxablity. I suspected that they end the program at a “bad time” (i.e., for the Gooferment; when they needed the money), make it all taxable right there and then, and I’d be stuck for an even bigger bill. Argh!

SO! Short story, long! No gold confiscation. IRA / 401k confiscation.

It’s easy. Only have to “rob” a few thousand “custodians” who are mostly big banks and brokerages that are already under the Gooferment’s thumb.

It’s “enough”. 13T$ will allow the Gooferment to keep on spending.

It’s “politcally feasible”. Propagandize the Sheeple. Promise them “enhanced Social Security”. (With interest rates at below 1%, how much cash flow would you have to pay on 13T$? Think lie they are taking out fixed rate mortgage and you’re stuck with the paltry returns. No adjustments. Argh!)

That’s the question.

And so what are you going to do about it.

Sheeple!

# # # # #


PLINKY: That Special Book in My Life

Wednesday, July 7, 2010

My first novel. Five decades after it could have been written.

“CHURCH 10●19●62” 978-0-557-08387-9

Action, adventure, fiction, Cuban Missle Crisis, TEOTWAWKI, Alternative history, heroic, and I wrote it.

It’s what I wished had happened.

How’s that for sad?


POLITICAL: Too big to fail doesn’t appy to nations?

Wednesday, July 7, 2010

http://libertyslifeline.com/2010/06/28/the-regulators-are-dead-long-live-the-regulators/

The Regulators are Dead, Long Live the Regulators
Jun 28, 2010
2010 Election, Bailouts, Economy, Fiscal Crisis, Liberty, Obama, Politics, Taxes

*** begin quote ***

Senator Chris Dodd and Representative Barney Frank were at the heart of the financial debacle, claiming that Fannie Mae and Freddie Mac were in sound financial shape. Meanwhile Senator Dodd was getting a sweetheart mortgage from Countrywide as a “Friend of Angelo” Mozillo, the CEO of Countrywide. Now we are to believe that Senator Dodd and Representative Frank have ridden to the rescue and have crafted the solution we have all been waiting for, just don’t ask about Fannie and Freddie, they aren’t included in this master work.

*** end quote ***

“Too big to fail” means too big to permit to exist.

In the real world of nature, there’s a limit on growth and size. Bee colonies split. Poor people emigrate. You can only grow so big.

Common problem for publicly traded companies is they can’t grow at a rate sufficient to command a premium multiple in the stock market.

So the problem is yet unaddressed.

Some ideas might be an arbitrary limit on a company’s balance sheet. A “too big company” might be subject to tighter financial regulation, an insurance tax, or even an absolute limit.

Without the gooferment, in the real world, the huge enterprises couldn’t exist. Logistics don’t scale. Competitors emerge.

It’s sad!

# # # # #


%d bloggers like this: