Monday, November 5, 2012

Why Did the Government Steal Our Gold in 1933...

...and more importantly, how will they do it again?

I don't know if any of you have been watching this, but a number of countries are repatriating their gold. Bringing it home from money center places where it is stored, places like London and New York City. Gold is a medium of exchange and collateral. It is and has always been, real money. In the old days when we actually backed our currency with gold, trade imbalances were settled with gold. Rather than send the heavy metal to and fro- we simply added and subtracted reserves in places where international commerce was conducted. That's why we are holding vast amounts of the world's gold.

But since we no longer have a gold standard (1971) and today's trade imbalances are settled in various currencies at various rates of exchange- why do we still have other countries' gold? That is a very fair question indeed. The forty year question. It is also a question that countries are beginning to ask themselves. Venezuela has already repatriated nearly 100 tons. But the real biggie, and the reason I am pointing this out is that suddenly Germany has called for an audit of it's gold. Just the gold held in New York. Weird huh? Remember Ron Paul asking about an audit at Fort Knox?

Interesting. Personally, I believe it should be perfectly acceptable to audit your own gold. In fact, I would certainly do that so that I could prove the existence of and know the exact tonnage before repatriating it.

Is there a chance Germany's gold is missing? Yes there is, but that is another subject entirely. Why now? Why after 40 years is Germany suddenly interested in it's gold in the midst of the euro crisis?

The timing makes sense. In fact, I believe Germany may well be positioning themselves for an exit out of the euro and back into the deutschmark. Backing their new currency with gold. Germans are not idiots and they certainly show great fiscal restraint and acumen. Germans know money.

In 1933, The United States government seized all of the gold held in private hands and made it illegal to "horde" it. Ostensibly, they had an excuse. Currency was minted and backed by gold. The US Treasury had the right to withdraw it's use of gold and use another medium of exchange. Of course, this was simply an excuse to seize all of the gold and inflate away debt by printing unbacked dollars. Interestingly enough, in this link that I provide, the government telegraphed it's intentions to bankers. Bankers were able to "front run" the impending seizure and make enormous profits. They did the same thing recently when the Federal Reserve Bank announced it was buying treasuries. Large banks simply went out and bought the maturities that the Reserve Bank was going to buy, running up the price and selling at a profit. Of course all of that conduct should be illegal- but it is not. In the end, the taxpayer pays. At interest. Unfortunately, nobody seems to give a shit. When you have that level of apathy, with an idiot public glued to their cellphones, it can only be a matter of time before the criminal banking class in this country turns us into a Banana Republic. They're doing it now. Without fear of criminal charges. Just look at the outright theft (1.6 billion) of client accounts at MF Global.

That's where we fit in.

This time around the government has no excuse to seize gold and silver. None. They have no claim, no standing. But that doesn't mean they won't try to take it and that certainly doesn't mean they won't try taxing you to death as they print and print and print- trying to avoid an inevitable debt collapse. They may try to tax all transactions involving precious metals because the one thing that both the bankers and the government fear and hate- is competition from precious metals. If they control the medium of exchange- they are guaranteed their cuts. When citizens start bartering, trading labor, using precious metals to settle debt, and not reporting income producing activities, bankers and government have a problem, don't they? They get cut out.

Remember the Magna Carta? The Boston Tea Party? Eventually greedy men and their greedy ways get confronted with the barrel of a gun. Please don't think that can't happen again.

The easiest and safest way to transfer wealth without paying taxes is through the use of valuable commodities that the government cannot track. Think about that. You use your capital to purchase precious metals. Who knows how much you have? You protect your heirs from the death tax. More importantly, you do not enrich a voracious government who wastes your work product by delivering it to greedy, thieving bankers.

If it's in the bank- it ain't yours. Bet me when I say possession of precious metals is still- 9/10ths of the law just as it was in 1933. They closed banks back then and just took it out of safety deposit boxes. It's gonna be a little harder for them to pull that shit again.

Pay attention to what is going on in the world right now. (The media sees no significance in it as long as they can garner a bunch of hits by showing some bimbo or celebrity cleavage.) The world is broke. Governments and bankers are going to try and steal every dime that they can. Gold is going to become the international currency once again and that reality is unfolding right in front of your eyes. Those few eyes that are not distracted.

I wouldn't want to get caught 100% invested in asswipe when the implosion happens. Watch for precious metals to swoon right after the election. Be a buyer. Because two months later- the fiscal cliff happens. The debt ceiling will go up. They will kick the auto tax cuts down the road. (remember that super committee bullshit?) Everything that happens post Jan. 2013 is going to be good for gold. I believe that and it is certainly just my opinion. Don't discount the efforts of those who will try every dirty trick to postpose the inevitable. After 5 years on the sidelines, I am back in. They have been kicking this can down a very long road. In 2013, we may just run out of road.


Anonymous said...

Precious metals swoon? Why would you say so, sir? Isn't the re-election of Obama (the betting houses are calling for his re-election) a good thing for the precious metals? (Obama wins, Bernanke stays, PMs soar; Romney wins, Bernanke goes, PMs plunge). Are you therefore saying that Romney will win?

Brian said...

I do think Romney wins. I am kind of delaying decisions up to the point that the debt ceiling starts getting kicked around and the auto spending cuts get suspended.

I think a Romney win will suppress metals prices temporarily until it dawns on markets that they don't have any more of a solution than President Numb Nuts. Maybe I am wrong and no swoon happens...still proceeding w caution here.