06/03/10 Tampa, Florida – To show you how things get around, I get this from Ed Steer’s Gold & Silver Daily, which linked to an essay by Adrian Ash, at bullionvault.com, posted over at safehaven.com, and bearing the title “Gold Gets All Political.”
The thrust is that, as Mr. Steer says, “Adrian floats the disturbing possibility that governments, looking around for easy sources of revenue, may decide to tax the private ownership of gold.”
Well, I am happy to be the “go-to guy” when it comes to questions like this, and I am happy that I can put Adrian’s fears to rest.
He can rest assured that the government will tax the private ownership of gold, and everything else, too, highly reminiscent of the phrase in the Declaration of Independence that reads that the government “has erected a multitude of new offices, and send hither swarms of officers to harass our people, and eat out their substance” which, at this point in time since 1789, is 1 out of 5 workers who are paid from the collection of taxes, and a large system of governments which spends more than half of all income, and spends up to two-thirds of all income if the cost of compliance with government regulations is included!
Everything will be taxed, as things are already bad, as easily seen in an essay by Mike “Mish” Shedlock, of Global Economic Analysis, who writes that the government got less tax revenue remitted, spending went up despite it, thus the budget deficit is rising, the national debt is rising, and all in a pretty dramatic way, too, as he writes, “The excess of spending over revenue rose to $82.7 billion last month compared with a $20.9 billion gap in April 2009. It was the second April deficit since 1983.”
In fact, he says, “April marked a record 19th straight monthly shortfall, highlighting the challenges facing the Obama administration,” which shows that Mr. Shedlock is mellowing, as he knows, better than most of us, that we are Seriously, Seriously Screwed (SSS), and calling such an unstoppable horror a “challenge” seems like a joke, and it must be, because it made me smile!
Anyway, more evidence of a certain mellowing in Mr. Shedlock is found when he says, “Deterioration in the government’s balance sheet in coming years raises the risk of higher interest rates even as an improving economy helps lift tax receipts,” which doesn’t even sound like him!
He says “raises the risk” when he knows exactly why interest rates would rise; inflation in prices! The buying power of the dollar will be falling as a result of all that creation of more money, and the buyers of bonds want to be compensated for that loss, and they will demand higher interest rates to get it.
Well, he does not want to get into that “inflation-prediction” swamp with me, and instead said, “The government has reported budget surpluses in 43 of the past 56 Aprils,” which is pretty remarkable, but not as remarkable as the fact that “The last time the US had back-to-back April deficits was 1963-1964.”
1963-1964? Yow! I leap involuntarily to my feet, my Powerful Mogambo Brain (PMB) whirling in shock when I ominously notice that this is exactly when the long bear market of 1964-1982 began! Yikes!
“Anyway,” you are perhaps thinking to yourself, “maybe it is not as bad as all that, and maybe with a little sense of proportion and dispassion, qualities completely alien to this Mighty Mogambo Moron (MMM), we could discern a small ray of sunshine, whereas he sees nothing but gloom and despair at every turn, like when he turns around and sees one of the kids looking at him while holding a butcher knife, and when he asks, ‘What are you doing with that butcher knife?’ and the kid says, ‘Nothing. Yet.’”
If you think that, then I laugh in Rude Mogambo Scorn (RMS) at you, because for one thing, none of my kids is stupid enough to use a knife to attack an angry, paranoid guy who is, as they say, “packing heat,” and for another thing, I am laughing in RMS so hard that I cannot even find the breath to begin to tell you why I make such sport of you! Hahahaha!
For that, I turn again to Mr. Shedlock, who says the particulars are that, compared to the same month last year, “Revenue and other income fell 7.9 percent,” which is a huge drop, although we are still looking at a cumulative $245.3 billion in revenue since October.
For reasons that I can only guess are, at the root, a result of the Federal Reserve creating so much money and buying up so much debt and assets from corporations of one sort or another that “Corporate tax receipts totaled $77.1 billion for the year to date, an increase of 8.9 percent,” which seems fairly remarkable in a kind of “lying, thieving scumbag” kind of way.
The bad news is about us workaday sweat-hogs out here in the real world, doing our stupid jobs while also performing most of the duties of all of the people who were laid off in management’s continually desperate “cost-cutting” strategies, including the only people who knew what they were doing, and now things are hopelessly screwed up, and we are getting whacked, as evidenced by the fact that “Individual income tax collections were down 11.6 percent so far this fiscal year to $500.8 billion.” See what I mean? Our incomes are down by almost 12%! Wow! Whacked!
All in all, I don’t know what, but Something Very Bad (SVB) is going to happen before long, which is about how long it will be before gold and silver shoot up in price! Whee! This investing stuff is easy!
The Mogambo Guru
for The Daily Reckoning
The Mogambo Guru
Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning , and other fine publications. For podcasts featuring the Mogambo, click here.
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Funny you should mention Shedlock … he’s been pushing overall DEFLATION due to credit destruction for as long as you’ve been pushing INFLATION due to increasing money supply increases. So far, Shedlock has been right. There is no inflation anywhere to be found (from both credit destruction and lower overall demand for houses, cars, etc.) But I’m betting all that money parked at the banks will eventually be loaned into existence .. and you will get your inflation. Eventually.
Oh no, not a tax on gold. It does not matter if the good ole USA is in debt up to its eyeballs. You do not want to be part of the equation hiding out in your bunker rarely seeing the light of day and all alone with your precious gold not partaking in the problems of the country because that would be unAmerican as any apple pie you can get just as long as you get yours and the hell with everyone else. To sink or swim on your own not asking for anything from anyone else just to be not bothered and living on your own terms. Good for you.
Like .99cents is so much lower than $1.00. Pathetic.
From each according to his ability, to each according to 99 cent Nation. Go ahead – walk away from your mortgage. Now let’s bail out the banks. Bend over folks, it won’t hurt much at all.
I think we figured out what happened to Harry.
Not to worry Mate, the gov will not tax gold without the proper procedure!
First claim the need to register your gold to prevent money laundering, funding terrorism, and to help crippled children. Second, demonize those “hoarders” of gold who are the root cause of all those lousy gov financial decisions.
Once fools have registered their gold, then it is natural for the gov to hold it for safekeeping and to back the new gold dollar. And should you decide to keep your gold, brown-shirted thugs will be sent to convince you to change your mind.
Richard Daughty (Mogambo Guru),
I read you because you are just so/too funny and publish so often.
Kids with knives; I hope they never get into cocaine and turn violent.
“– walk away from your mortgage. Now let’s bail out the banks. Bend over folks, it won’t hurt much at all.” I assume you are talking in past terms as apparently people have walked away from their mortgages and we have already bailed out the banks. It does look like the prevailing feeling is its everybody for themselves. How else would you describe it? Perhaps you don’t know scorn when you see it.
Like .99cents is so much lower than $1.00. Pathetic
You ever do stand-up? You should eb on TV !!
Thanks for the laughs in this FUW…..
The Citizens of the Land will have revolted against the spenders long before any tax on gold holdings will be even considered. The railroad rails are being prepared as we speak to usher the Bums in Washington out; we will get New Bums, but they will cut Government spending since we need this depression to flush out all the garbage debt out there. If my gold is taxed (hypothetical statement), do I get 1.18945 votes at the polls next lever pull since this is discriminatory taxation? I am pushing a tax on Spandex worn by 300 pound Walmart shoppers! SO BUY SILVER AND SHUT UP. They will never figure out that silver has been a reserve assets in such countries as China for centuries. This message is encoded so the Feds can’t read it …. it is written in plain English. Sage O’Wexford