An American Exit Tax?

Well, now we've heard everything. If you are successful at accumulating wealth and decide to liquidate and move overseas for cheaper living, watch out! Our government wants to tax your wealth as ordinary income. Oh, you get a $ 600,000 exclusion if you have more than $ 2 million. Great! You work hard, buy stuff with after tax dollars and then when you sell it years later, you are taxed on the excess as if it is ordinary income. It seems that is only if you renounce US citizenship but how long will it be before that provision is changed? This is very revealing. Throughout history, governments have stolen wealth from their citizens and when the citizens figure out a way to protect themselves, the governments get creative and figure out new ways to rob the masses. Ours is no different; especially now with the out-of-control spending and falling corporate tax revenues. Plus, now our illustrious President is asking for ideas to get business back on track!! As if he didn't know. He's a Socialist who doesn't want anyone making a profit. What he fails to grasp is that if a business can't make a profit, it can't stay in business and people lose jobs! It's real simple President Obama! If you want to help business, reduce taxes! I have a really good idea for you! Small business corporations that are considered "personal services corporations" are taxed at 35% minimum instead of the standard 15% minimum. How 'bout you remove that 20% extra taxes on the personal services corporations and see what happens? I'll bet there will be some growth then. Thanks for listening.....

Regulating the Fed

“A number of the legislative proposals being circulated would
significantly reduce the capacity of the Federal Reserve to
perform its core functions,” the Fed chairman said in a
commentary in today’s Washington Post. The measures
“would seriously impair the prospects for economic and
financial stability in the U.S.”

Is this a joke of some kind? The dollar has lost over 95%
of its purchasing power since the Fed took over in 1913 and
that somehow shows stability? Bernanke is a kook or liar of
the first class.
This little excerpt from the Market Oracle's Robert Bradshaw's exposé
will help understand why so many want the Fed abolished.
"In theory, the Fed was established to stabilize the economy,
smooth out the business cycle, manage a healthy, sustainable
growth rate, and maintain stable prices. In fact, it failed
dismally. It contributed to 19 US recessions (including the
Great Depression) and significantly to the following equity
market declines that accompanied them as measured by the
Dow or S & P 500 average; - 40.1% (Dow) from 1916 - 1917;
- 46.6% (Dow) from 1919 - 1921; the 1929 (Dow) crash in two
stages - 47.9% in 1929 followed by a strong, temporary rebound and
then - 86%; -89% peak to trough total from October 1929 to July 1932;
- 49.1% (Dow) from 1937 - 1938; - 40.4% (Dow) from 1939 - 1942;
- 25.3% (S & P) from 1946 - 1947; - 19.8% (S & P) in 1957;
- 26.8% (S & P) from 1961 - 1962; - 19.3% (S & P) in 1966;
- 32.7% (S & P) from 1968 - 1970; - 45.1% (S & P) from 1973 - 1974;
- 20.2% (S & P) from 1980 - 1982; - 32.9% (S & P) in 1987;
- 19.2% (S & P) in 1990; - 18.8% (S & P) in 1998;
- 49.1% (S & P) from 2000 - 2002; and - about 50% (S & P)
and counting (excluding a bear market rebound) from October 2007."
Read his entire, very excellent article on the website at
http://www.marketoracle.co.uk/Article8909.html which I strongly
recommmend you do soon before the article disappears.
Remember all the support for a Federal Reserve Systems resulted
from market "panics" that "had to be controlled". Later, the
powers that be decided that the word "panic" was too strong so
they substituted the word "depression". The idea was to keep
the public from "panic". Later, the same public policy makers
decided that the word "depression" was now too strong so it was
time to use a less offensive word and they chose "recession".
That's rich isn't it? What it really means is the conditions
of "recession" we now have used to be called a "panic".

The only thing controlling the Fed would impair is the banksters
ability to earn interest on money they create from thin air.

Time to end the Fed and print currency without debt.
Say, "No!" to interest on circulating currency.

Gold has the dollar on the ropes

Are you watching gold? If not, you should be. It appears to

be reflecting the fantastic flood of dollars created by our

Federal Reserve. Normally, people would say it was created

by our empty suit President, but, to be fair, none of our

Presidents have had any control over the Federal Reserve...ever.
That means that we cannot fairly blame them for rotten monetary

policy. None of our Presidents (including Reagan and possibly

excluding JFK) have even attempted to control our central bank.

As long as the government borrows money into existence, there

is no hope of paying the National Debt; mainly because the money

for interest isn't created and thus, the debt is perpetual.
Of course, we could print United States Notes, without borrowing

them (JFK did but didn't live to enjoy the benefits of that move)

and pay them to the Federal Reserve System to retire their Federal

Reserve Notes. We could use the US Notes to pay the interest and

end the debt cycle. The problem with that is that the inflation tax

on us would no longer be hidden and politicians are nothing if not

sneaky about how they take money from us. Overt taxation for all

the stupid stuff our government would be so unpopular that "We the
People" would vote all the bums out. We probably should anyway

just to be safe. No matter what we do as a country, it appears that

sometime the market will reflect the diminishing value of the dollar.

In that case, if you have gold and silver, the price will go up and you

will be able to pay off debt in cheaper dollars (after paying taxes on

your GAIN(?)) and you may benefit somewhat in that scenario.

BUT...what will happen if we experience a credit contraction?

VISA made an announcement some time ago that they may have to
write off almost $ 1 trillion to bad debt. WOW! Since our currency is

backed by debt (seems silly doesn't it?) that means a LOT of money

will disappear!! That means DEFLATIONARY(!) pressure. Does

that mean I'm EXPECTING deflation? Actually, no. I think it's possible

as long as currencies are manipulated but when you look at the

overspending ALL governments are doing, it seems much more likely

that we are in for a round of incredible inflation. Hang on to any

assetsyou have that are not denominated in dollars (bonds are

probablythe absolute worst). Gold is still a monetary metal despite

what thecentral banks the world over have tried to do to demonetize it.

Silver is a close second and actually may increase at a faster rate

than gold. In 1687, the silver to gold ratio was 14.94 ounces of silver

to one ounce of gold. It gradually rose all the way up to 16.25 ounces

of silver to one of gold in 1813 and fell back to 15.92 by 1873.

This is from history of the London Mint. Gold was demonetized in

England in 1874 and the ratio went to 23.72 to one by 1892.

However, history shows us that the ratio is generally around

15.5 silver to one of gold. Right now the ratio is 64.27 ounces of

silver to one ounce of gold!! Let's be daring and say it will get

to 25 to 1. That means we're looking at a price of silver of over

$46 per ounce. Either gold is overpriced (NOT!) or silver is

underpriced (YEP!). Either way, silver is the way to go for now,

unless you have so much money that the amount of silver you

will purchase will be hard to store and/or transport. Then move to gold.

Birds and money

Odd ducks and black swans signify unusual financial events in the jargon of the business. Black swans are the focus right now. Not seeing a black swan doesn't mean they don't exist but seeing one categorically proves that not all swans are white. Financial markets don't always behave rationally and major upheavals are characterized as black swan events. The best known "black swan" event was the crash of '29. We've had others. Russia defaulting on 540 million dollars worth of bonds ruined at least one hedge fund which had an otherwise solid plan. So, what does this have to do with todays situation? I'm guessing but I think we are in for a black swan event. Specifically, I think we may be looking at a HUGE deflation when our Washing gang decides that it's cheaper to go cash and carry than continue to service an unwieldy debt. When we pay more in taxes than we get in governmental goods and services because of interest, we have a politically unworkable situation. The only thing that could be cut is the interest and the way to do that is debt repudiation. WHICH causes another problem. Our money, which is based on someone going into debt to create it, will vanish, unless you have the physical cash in an envelope stuffed under a mattress. That will mean prices crash but you still have to come up with the dollars to pay mortgages and other debts. That will be hard if no one has enough dollars. You will probably lose your house as a result. What about gold? What will happen there? The price would drop precipitously but it won't get to zero. You'll still be able to buy food and stuff but we may be looking at $20 / ounce gold again. You have some value but not enough to pay the mortgage. Once again, the banksters win and get the property. Personally, I think they (the Washington banksters) will do anything to win and don't care who else gets hurt. So, if you have gold and silver, you may want to sock some cash away as well, just in case.

Well, gang, the Obama administration sure has created a lot of money lately! That's great, right?! Uh, well, that depends on where you are in distribution. You see, money, in our system, only measures wealth; it isn't wealth itself. Let's face it, true wealth only exists as a result of human effort. Is gold in the ground wealth? Well, only sort of. It's not useful wealth until someone makes the effort to extract, refine and mold it into a useful medium that it can truly be called wealth. The same can be said for just about anything. Rocks are a form of wealth but until it's cut or crushed and sorted into various sizes (countertops or gravel), it's not useful. In our system, someone has to borrow currency into existence. This means that someone is promising to create wealth tomorrow for cash today. Those promises can be made far faster than anyone can keep. Obama has spent more money so far that all previous presidents.....combined. What that means is the counters of wealth are being increased much faster than new wealth is being created. The only possible result is price increases and the faster he spends money, the faster inflation will run. You only benefit if you are the recipient of the new money at it's creation. Then you can get the full effect of buying power before the general price increase. Can anyone say, "Zimbabwe"? There is an alternative and it's not good. Our government could renege on it's debt which would wipe out its credit and about 95% of the currency. Remember, the currency exists because someone promises to pay. No debt, no currency. That would make the dollar scarcer and, surprise!, more valuable. Prices will plummet, except what you already owe and dollars will be harder to acquire. This would put Joe American at a serious disadvantage. Anyone think the bankers will allow themselves to be put to disadvantage by allowing hyperinflation? Me, neither. The best answer is to get out of debt, now. Sell your home and rent or pay it off. Harry Dent (http://www.hsdent.com/) predicted last fall's stock market collapse way back in 1998. I have the book. He's predicting more trouble later this year, especially for real estate. Do I think the US Government will repudiate the debt? Not voluntarily. My concern is that things are out of control.

Banking with Gold

Let's assume for arguments' sake that gold is money. I know plenty of people believe that but I'm asking the non-believers to cross over for just a minute or two. Now that I have your attention, the question I want to address is: How can we bank with gold and do other transactions that currently require us to use FeRN's (Fradulen...excuse me, Federal Reserve Notes)? I'm glad you asked that. I have an idea. First remember that a prime problem with banking using gold is bank robberies. The crooks find out where the gold is and go for it. My idea fixes that problem. In our day of instant information, why not use Thomas Jefferson's approach to storing power to store gold? He said he knew of no safe repository except in the hands of the people. Hmmmm. Not bad. How about a banking SYSTEM that leaves the gold in the hands of the members and only the amount they are willing to risk is combined with other depositors' risk capital for lending to a good business proposition? Here's how it would work. Let's say you have 100 T.O. of gold. You're not willing to risk all of it but you are willing to risk say, 20 troy ounces. The banker (in this case, me) doesn't care how much you have in total, only what you are willing to commit in case the right deal comes along so you can earn some interest or profit on it. Okay, if all members subscribe to fixed amounts, the bank keeps that information on hand so the members can be called on to evaluate the deal that gets past the vetting by the banker (remember? me.). Only really solid deals will be offered and the member would subscribe or not subscribe. The only time the gold would be in one place is delivery at closing where the investment or loan is secured by something. Because the vast bulk of the gold is out in private holdings (depositor information is kept secret so no one knows) there is no hoard of gold to rob. Neat, huh? Plus, the only deals that would pass muster would pay return in gold or food or some other agreeable commodity. By using gold (silver and platinum will work as well) eagles, which are legal tender, the face value of the coins are what is used for accounting and will keep the members well under the threshold of income tax liability. Imagine! An investment that would pay back in gold! Maybe food, too!
It's got possibilities!

Disappearing wealth...?

The media complains about how much wealth has disappeared since last summer. Oh, please. Wealth doesn't just disappear (unless it's covered by lava or nuked). All those dollars represented speculative gains (wealth as a term doesn't apply) in hopes that some greater fool will buy at a higher price. This is known as, "the greater fool theory". How apt. Real wealth requires labor. Someone digs ore from the ground and refines it or plants crops and harvests them or in some way changes natural resources into something useful in everyday life. This is wealth built on labor and is lasting. Financial wealth is often illusory. Not always but often; such as now. Our Federal Reserve System (Central Bank, also the FED) has been creating money from nothing for so long now (since 1913) that our entire financial system is like a great big soap bubble sitting on top of bedrock. The bedrock represents the real wealth of our country and the soap bubble represents claims against that wealth. Not only that, we have a derivatives market that represents claims against the soap bubble. Sheeeesh! What we see popping is the bubble not the bedrock. Like the tulip mania in Holland in 1637, the perceived value of a tulip bulb drove the prices so high that one contract sold for 10 times the average annual earnings of a craftsman. Suddenly, someone perceived that the bulb only grew flowers and sold out. Someone else sold out and in February 1637 the price collapsed. Did the wealth vanish? No, someone sold at the high and kept the wealth just like now. The stock market is a zero sum game: for every seller there has to be a buyer. Someone gets the high price when they sell. In our case, the air is being let out of our stock bubble and reality is setting in. That's all that is happening. Of course, if you were in with the money manipulaters (read the FED) you would know ahead of time and would be able to liquidate and keep your profit. When the FED sent the word out to restrict credit, which the banks have done, the collapse was inevitable. Stick with bedrock type investments: gold, silver, platinum, producers of such, producers of food.

DIGITAL Gold??!!

I love WorldNetDaily. They report stuff nobody else does. Today, Jerome Corsi reported that there is a move among the globalist powers that be to move to digital gold. Right. eGold has been around for years and globalists henchmen have been doing everything they can to trash it, claiming that it's a fraud. Uh-huh. eGold had the gold until it was seized. My only complaint about eGold (it's a little one at that) is that, when I lost my password and the email account I was using disappeared, I couldn't get back into my account and there is no way for them to contact me and know it's me. Probably it's mostly my fault because they do have the responsibility to protect the gold from hackers. Fortunately I only had about 30 bucks in it. Otherwise, it was a pretty good idea because they were regularly audited and published the results. Now that the globalists are getting the idea, I wonder if the new digital gold mint will submit to an audit. The Federal Reserve doesn't. They are strongly globalist so, my opinion is that the globalist controlled digital gold won't either. Guess what? That means inflation as surely as the night follows the day. I'm okay with digital gold issued privately that is audited but our governments have proven that they can not resist the temptation to issue more receipts than the amount of gold (or anything else for that matter) they have. Why? That's easy. The government won't put itself in jail for violating trust. Private mints that violate trust have a harsh penalty to pay and rightly so but government getting involved in the digital gold business is a major conflict of interest. Avoid it. By the way, the Perth Mint in Australia (government controlled) has a certificate program that is used to finance the inventory of minting operations. That's okay if you know about it ahead of time; I found it in their audit footnotes (something like footnote 27) which means, your gold isn't sitting safely in a vault but is used in minting operations. If you want to, use the certificate in the short term to move gold across international boundaries and redeem them right away but the scuttlebut is that redemption takes a long time. Be aware of the details which change quickly. Best to hold the metal.

Let's look at what has happened since the last post. I've been busy doing year end reports for clients so have not had time to do a posting but they are all done so here goes. Our federal government is trying to solve a debt crisis by borrowing more money. Politicians always try to solve difficult issues by pushing it off to someone else; like our grandchildren. This just has to stop. Do you want to know how to protect yourself? Move to assets that can't be seen. Over the years, liberals have complained of greedy Wall Street types. For the sake of argument, let's give them that. I think all agree that greedy Wall Street types are not stupid. They are reacting to the stimulus plans like they contain plagues. Where is the money going? One significant place is gold and silver (platinum, too but not vocally). If you take delivery of the metal, it's invisible. If you buy anything other than the metal, you have visible assets that can be taxed, seized or otherwise lost. Witness the debacle in Argentina recently when the government appropriated (stole) the money in the retirement plans to raise some cash. Is it any wonder that people want bank secrecy somewhere? Obama has very Socialist leanings and ultimately will do the same thing. If you think I'm an alarmist and do nothing, you are shooting craps with your future. Take some steps to protect some assets. We are right now going through the same things that 1922 Germany did to shore up its currency. By November 1923, it took billions of marks to buy a loaf of bread. The continued creation of currency from thin air will cause unbelievable inflation in the near future. Next post will give more examples from history.