I'd like to bring up a point where the premises is based on the Constitution stating that the states shall not accept anything other than gold and silver as payment of debt.
So, if I purchased physical gold with my fiat paper dollar say in 2003 at say $300/oz and want to resell them in 2011 and I get $4,502.23/oz for it, the claim I'm making is that capital gain should not apply since I would only convert that gold into paper just so I could purchase a house, food or anything. In fact, I would have not gone through the trouble of converting if it wasn't for this electronic world. So, the fact that this paper money is losing value is not my fault and is not a gain. In fact, it is not my gain but the loss of those who hold dollars.
Those holding dollars should be the one getting a capital loss deduction rather than a capital gain extracted on the gold holder.
They are ready to handle supreme court decision on gun control or a myriad of subject which some are not explicit in the constitution. As for Gold and silver as money, the constitution is clear as crystal. How would the IRS and the government react to a citizen ready to claim the capital gain on gold is not taxable? I wonder...
Wednesday, December 10, 2008
Tuesday, December 2, 2008
deflation is not bad! As long as you didn't had a debt driven economy
Under a gold standard where you don't have a fractional reserve lending on steroids like we have with central banks, debt is really a 4 letter word that everyone tries to limit.
This means that a house could lose slightly its value in gold over a 10 year span (depending on neighborhood changes, etc) This means, you better pay off your debt and you better not take a huge mortgage initially. In such case paying either cash or with a minimum of 30% down payment would be the norm.
So, to say it's bad is wrong. It's good for the savers. Because we have built this system of inflation where it is bad to save, the concept of taking debt became dominant which reinforce the believe that deflation is bad. Yes of course deflation doesn't look good in such case.
Another reason to start clean and plan to go on a gold standard.
This means that a house could lose slightly its value in gold over a 10 year span (depending on neighborhood changes, etc) This means, you better pay off your debt and you better not take a huge mortgage initially. In such case paying either cash or with a minimum of 30% down payment would be the norm.
So, to say it's bad is wrong. It's good for the savers. Because we have built this system of inflation where it is bad to save, the concept of taking debt became dominant which reinforce the believe that deflation is bad. Yes of course deflation doesn't look good in such case.
Another reason to start clean and plan to go on a gold standard.
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