Cash Is Trash

Protecting Your PM Investment

By Jeff Nielson of Bullion Bulls Canada

With the U.S. government having already stolen the gold of its own citizens once, a question which I have often been asked by American readers is, "Do I think the U.S. government will steal [their] gold again?" My reply has always been that in the absence of a gold standard there is no motive for simply confiscating all gold again.


With U.S. debts and liabilities exceeding $100 trillion, while all the gold inside the U.S. is worth considerably less than $100 billion (at current values) even a quadrupling of the gold price from today's price would still make it totally inconsequential in restoring solvency to the U.S. government. If the government were to stoop to directly (and openly) stealing from its citizens, it would be much more likely to pillage their bank deposits, which are more than ten times as large as their gold holdings.

However, there is a further point which I should have made which relates to this issue. Specifically, even without formally "confiscating" our gold, all of our governments have already created a vehicle to steal a portion of our gold: our taxation systems. The pretext our governments use/will use to steal our gold (and silver) via taxation is "capital gains." This is such a perversion of the concept of a "capital gain" that such tax treatment for gold and silver is simply evil.

Keep in mind that if you buy physical bullion and sell it for a profit that most of that gain is merely the money you didn't lose by foolishly storing your wealth in our paper, "fiat" currencies. In other words, there was not a capital gain for your gold or silver, but more properly there was a capital loss on all paper currency.

Once we recognize this obvious truth, it leads to another, equally obvious truth. If the government believes it has the right to tax our capital gains we make in gold vs. paper, then it must allow claims made on the commensurate capital losses in our paper, "fiat" currencies versus gold.

In fact, our tax codes refuse to acknowledge those equally valid capital losses -- and for an obvious reason: it would amount to receiving a tax deduction for inflation. Since inflation is the vehicle which governments and bankers use to steal our wealth in the first place (which creates the need to buy gold and silver), the last thing they want to do is to slow down that theft.