Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Joined: Sep 14, 2004 Posts: 6625 Location: Rural Virginia
Posted: Tue Jun 24, 2008 8:02 pm Post subject: Re: Financial Tsunami
Jack, there some very convincing arguments against the feasibility of gold confiscation posted on the Internet.
Some of your points are good, though.
But I really think the whole thing would prove impractical. Impossible, even.
Dealers' records of who bought gold and when would be utterly worthless, since they could not be used to prove that those individuals still owned the gold. Owners could say they lost it, sold it, had it stolen from them, or threw it into the ocean in a fit of madness.
It would take years---or a Big Brother-like dictatorship---to enact the sort of legislation you describe. In the meantime, what would people be doing with their gold? Those who have it in safety deposit boxes would withdraw it and bury it. Many would take it out of the country (as happened in the 1930s). Few if any people would cooperate---and cooperation would be key.
Furthermore, such talk would cause the gold price to skyrocket. It would become more valuable than ever. There'd be a black market for the stuff. There'd be a wave of tremendous generalized fear and panic, accompanied by a perceived or real collapse of the US government, which would cause gold owners to hold on to their gold more tightly than ever. And the dollar would further weaken.
I don't think the government has either the power or the competence to achieve such a feat, not these days. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Last edited by Heineken on Tue Jun 24, 2008 9:26 pm; edited 1 time in total
Joined: Sep 14, 2004 Posts: 6625 Location: Rural Virginia
Posted: Tue Jun 24, 2008 8:13 pm Post subject: Re: Financial Tsunami
Micki wrote:
Quote:
How are the Feds going to confiscate gold, Kingcoal. Tell me exactly how they are going to do it.
The situation is somewhat different this time. One reason they shouldn't confiscate gold is becasue according to central bankers it is just a barbareous relic. So confiscating it would be to admit that they lied and it holds value.
Assuming however they do go ahead, they don't need to confiscate all of it. Take what is in the ETF's and compensate with some paper money. Prohibit holding of bars and bullion and impose harsh penalties. Raid safe deposit boxes. (Already practiced in UK on 7000 boxes, without court order) Possibly reward dobbers.
Bit like the last confiscation except they can take a lot in one swoop with the ETF's. The big question is though if this will be coordinated across a number of nations.
Mick, we've banned heroin and cocaine but there are still heroin and cocaine. Lots. And it's very very valuable! Risky perhaps, but there's a strong and enduring market for these substances. Many people who are in that market would have few or no other viable alternatives.
I don't think most other countries would cooperate with confiscation, even if they could somehow coordinate such a crazy thing internationally.
The gold-confiscation myth reminds me of the old saying, "You can't legislate behavior." _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Joined: Dec 07, 2005 Posts: 2019 Location: Australia
Posted: Tue Jun 24, 2008 8:37 pm Post subject: Re: Financial Tsunami
Maybe. But I wonder if they were expecting gold confiscation back in the 30s either or if it took them by surprise.
Anyway, as I see it I can protect myself from confiscation, tax, counterparty risk by holding physical metal and not relying on gold pool accounts etc. Furthermore, the more physical that is removed from the market, the harder it becomes for the big boys to play paper games. So although not addressing exactly the question, I would say, I am concerened enough to withdraw the paper gold and instead put physical in "the sockdrawer". _________________ It's not a bailout, it's a buy-in" - Nancy Pelosi
Joined: Sep 14, 2004 Posts: 6625 Location: Rural Virginia
Posted: Tue Jun 24, 2008 8:49 pm Post subject: Re: Financial Tsunami
Yes, it happened in the 1930s, but the environment and population were very different from what we have today. Gold ownership was common then, for one thing. And the dollar was backed by gold! So you had a relationship between them that no longer exists.
I share your lack of faith in ETFs and safety deposit boxes. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Posted: Tue Jun 24, 2008 10:30 pm Post subject: Re: Financial Tsunami
Kingcoal wrote:
Ludi wrote:
At the beginning of 1934, 50% of all urban homes with outstanding mortgages were in default.
Wow, history repeats itself. I expect a round two new deal from the feds. Gold confiscation, etc.
There will be no "new deal" but there will be a "raw deal".
When Roosevelt was around, America did NOT owe the Chinese $1.6 Trillion. It takes money to implement a new deal. Who will lend us the money? We were a net creditor nation back in the 30's and that's why Roosevelt was able to do what he did.
I suppose the cornucopia PO scenario where we all put solar panels on our roof tops isn't going to work if we can't pay our mortgage?
Joined: Dec 07, 2005 Posts: 2019 Location: Australia
Posted: Wed Jun 25, 2008 1:34 am Post subject: Re: Financial Tsunami
Quote:
When Roosevelt was around, America did NOT owe the Chinese $1.6 Trillion. It takes money to implement a new deal. Who will lend us the money?
That could actually be a good reason to confiscate if payment in US Peso no longer is accepted. _________________ It's not a bailout, it's a buy-in" - Nancy Pelosi
Joined: Dec 07, 2005 Posts: 2019 Location: Australia
Posted: Wed Jun 25, 2008 5:26 am Post subject: Re: Financial Tsunami
It's normal risk management.
It is high impact low probability. And because it has happened in the past, it needs to be considered again. _________________ It's not a bailout, it's a buy-in" - Nancy Pelosi
Posted: Wed Jun 25, 2008 5:31 am Post subject: Re: Financial Tsunami
I was trying to stay out of this thread to be honest! ; - )
Confiscation or other draconian measures like capital controls cannot be ruled out as the USA goes bankrupt. They are already passing laws to make renouncing US citizenship (see Trader's Corner) harder and more expensive to give up. And the Patriot Act and anti-money laundering procedures now forced on bank and non-bank financial institutions is as much about controlling offshore financial centers as figthing terrorism. The CFTC and SEC even try to get control over regulation in other countries by for example wanting to supervise the ICE (currently regulated by the FSA) or Rule 144B about that securities can be marketed to US citizens at home or abroad. Someone has to repay the trillions in debt that the USA already owes as well as pay for ongoing unfunded future liabilities. If I was a US taxpayer I would be very nervous. There is nowhere to run and nowhere to hide. At least not legally. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Wed Jun 25, 2008 5:36 am Post subject: Re: Financial Tsunami
Even during the gold confiscation of the 1930s citizens were allowed to keep 5 ounces. That's $5000. I would expect, if it ever happened, for the cut off to be about $10,000 worth - which may still be 5 ounces when that happens. _________________ It's already over, now it's just a matter of adjusting.
Joined: Sep 14, 2004 Posts: 6625 Location: Rural Virginia
Posted: Wed Jun 25, 2008 7:08 am Post subject: Re: Financial Tsunami
MrBill wrote:
I was trying to stay out of this thread to be honest! ; - )
Confiscation or other draconian measures like capital controls cannot be ruled out as the USA goes bankrupt. They are already passing laws to make renouncing US citizenship (see Trader's Corner) harder and more expensive to give up. And the Patriot Act and anti-money laundering procedures now forced on bank and non-bank financial institutions is as much about controlling offshore financial centers as figthing terrorism. The CFTC and SEC even try to get control over regulation in other countries by for example wanting to supervise the ICE (currently regulated by the FSA) or Rule 144B about that securities can be marketed to US citizens at home or abroad. Someone has to repay the trillions in debt that the USA already owes as well as pay for ongoing unfunded future liabilities. If I was a US taxpayer I would be very nervous. There is nowhere to run and nowhere to hide. At least not legally.
The US is already "bankrupt" and has been for years.
There are plenty controls that would be considered draconian by US standards in place overseas. A 50% or 60% income tax rate might be considered draconian by any reasonable standards. Shredded property rights might be considered draconian. Etc. Everyone should be nervous, everywhere. As critical as I am of the US, I feel lucky not to live in a REALLY scary place like Nigeria, Turkey, or 95% of other countries.
The record of the US of late combines greater restrictions and threats, as you've catalogued, with greater incompetence and more ineffectualness. This is typical of a dying empire. However, the election of Obama could reverse some of these trends.
Physical gold consists of zillions of small objects that are easily concealed by private individuals. Not even the Nazis could find all the gold of the Jews they terrorized. The notion of US agents fanning out across the nation looking for gold is ludicrous. It would be easier to confiscate land.
Yes, anything can happen. But a pogrom by the US government against its own citizens on the scale you imply would be accompanied by the end of everything anyway. And, under those circumstances, as I said before, the dollar would be rendered worthless and gold would become even more valuable, with the result that it would be concealed ever more cleverly and held on to ever more fiercely by individuals---defended with their own lives. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Posted: Wed Jun 25, 2008 7:42 am Post subject: Re: Financial Tsunami
Sorry I was thinking more about capital controls and closing precious metal ETFs than physically hunting for gold bracelets.
Interestingly in many emerging market countries that I have lived, worked and studied is that they have most of the laws you would find elsewhere in place. They are just not enforced very uniformly. However, they come in very handy if you need to prosecute someone for any reason.
Those laws on the books can be conveniently ignored until they are needed. In the Ukraine fully abiding by all tax laws would have resulted (at the time) in paying out 160% of profits in taxes. Clearly not possible. So everyone lived in fear of the taxman, and was happy to pay them under the table.
Poverty and corruption threaten Russia: Medvedev
So any law prohibiting personal ownership of gold, guns or anything else do not need to be enforced, but they can be pulled out if and when you want to make an example of someone. Kind of like homosexuality laws in some Muslim countries. Useful to use against your political opponents. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Wed Jun 25, 2008 11:03 am Post subject: Re: Financial Tsunami
Heineken wrote:
MrBill wrote:
I was trying to stay out of this thread to be honest! ; - )
Confiscation or other draconian measures like capital controls cannot be ruled out as the USA goes bankrupt. They are already passing laws to make renouncing US citizenship (see Trader's Corner) harder and more expensive to give up. And the Patriot Act and anti-money laundering procedures now forced on bank and non-bank financial institutions is as much about controlling offshore financial centers as figthing terrorism. The CFTC and SEC even try to get control over regulation in other countries by for example wanting to supervise the ICE (currently regulated by the FSA) or Rule 144B about that securities can be marketed to US citizens at home or abroad. Someone has to repay the trillions in debt that the USA already owes as well as pay for ongoing unfunded future liabilities. If I was a US taxpayer I would be very nervous. There is nowhere to run and nowhere to hide. At least not legally.
The US is already "bankrupt" and has been for years.
There are plenty controls that would be considered draconian by US standards in place overseas. A 50% or 60% income tax rate might be considered draconian by any reasonable standards. Shredded property rights might be considered draconian. Etc. Everyone should be nervous, everywhere. As critical as I am of the US, I feel lucky not to live in a REALLY scary place like Nigeria, Turkey, or 95% of other countries.
The record of the US of late combines greater restrictions and threats, as you've catalogued, with greater incompetence and more ineffectualness. This is typical of a dying empire. However, the election of Obama could reverse some of these trends.
Physical gold consists of zillions of small objects that are easily concealed by private individuals. Not even the Nazis could find all the gold of the Jews they terrorized. The notion of US agents fanning out across the nation looking for gold is ludicrous. It would be easier to confiscate land.
Yes, anything can happen. But a pogrom by the US government against its own citizens on the scale you imply would be accompanied by the end of everything anyway. And, under those circumstances, as I said before, the dollar would be rendered worthless and gold would become even more valuable, with the result that it would be concealed ever more cleverly and held on to ever more fiercely by individuals---defended with their own lives.
Define 'bankrupt'. The US is still able to borrow money to pay it's debts, the only reason why a business entity declares bankruptcy is to get protection from creditors. That's what bankruptcy is: a legal way to obtain protection from creditors. The US is not currently bankrupt, just hopelessly in debt. It's the old analogy about owing the bank a million and having a problem, while owing a billion and the bank has a problem. The bank is the rest of the world who buys T bills. However, if they stop buying and are willing to take the inevitable huge loss on their holdings, the dollar will become worth less than the paper I wiped my ass with this morning. That hasn't happened yet.
Also, to answer the gold confiscation issue, it's already happening. Recently, a company who was making gold coins and touting them as a replacement for the dollar was raided and forced out of business. If the dollar crashes, gold, among other things will be used as a currency and they (federal government) don't want that to happen. They want people to have no alternative to the dollar. RICO and money laundering laws can be twisted around to put almost anyone in jail who trades outside the norm. Converting your dollars to Euros or whatever, then trading in those non-dollars inside the US could be made out to be money laundering by a federal prosecutor. When I talk about gold confiscation, I'm not talking about you; you are small fry. I'm talking about the bigger fish who will want to profit from a dollar collapse; they are the enemy as far as the US government is concerned. _________________ "That's the problem with mercy, kid... It just ain't professional" - Fast Eddie, The Color of Money
Posted: Wed Jun 25, 2008 11:21 am Post subject: Re: Financial Tsunami
Mr. Bill,
From what I am reading renouncing US citizenship seems fairly easy.
A person wishing to renounce his or her U.S. citizenship must voluntarily and with intent to relinquish U.S. citizenship:
appear in person before a U.S. consular or diplomatic officer,
in a foreign country (normally at a U.S. Embassy or Consulate); and
sign an oath of renunciation
Renunciations that do not meet the conditions described above have no legal effect. Because of the provisions of section 349(a)(5), Americans cannot effectively renounce their citizenship by mail, through an agent, or while in the United States. In fact, U.S. courts have held certain attempts to renounce U.S. citizenship to be ineffective on a variety of grounds, as discussed below.
Is the US gov trying to make it harder to 'financially' renounce US citizenship? If so, I didn't really find anything on that. I know the IRS is increasingly going after offshore tax shelters, but that is a different issue in my opinion.
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You guys are getting more paranoid each day, whatever happened to my topic "is gold still undervalued" I think the answer is obvious 
