by John Galt
September 11, 2012 23:00 ET
Imagine a world where the average Joe Schlub walks into his favorite coin dealer and asks his friendly retailer, “Hey Mike, can I buy a roll of silver American Eagles off of ya?” Before Joe can whip his wallet out, the retailer slides a government tax form in front of him and states, “Sure, just as soon as you fill this form out, provide two forms of certified identification, fill out this bank statement release form, and a thirty-four percent down payment to be held until the U.S. Government finishes verifying that you will not be using this purchase to hide assets and agree to pay any taxes due on realized or unrealized gains for owning this precious metal.”
Sound crazy? Not if the Obama regime gets re-elected and the hyperinflationary activities of the Federal Reserve and U.S. government are not put into check.
During the Obamacare debate, section 9006 was slipped in as a trial run to impose controls to monitor and tax purchases of gold coins in a legal, lawful manner from dealers within the United States (see ABC News, July 21, 2010: “Gold Coin Sellers Angered by New Tax Law“). While this proposed portion of the Obamacare regulatory nightmare would have impacted a broad swath of businesses, the reality is that it would have essentially put such severe restraints on dealers and customers that the industry would have been paralyzed if not extinct within a few years. Eventually, under great public pressure, this portion of the law was repealed by Congress but it was a clear indication as to what the future might entail should this regime win re-election in November.
Fast forward to what is happening in the PIIGS nations (Portugal, Ireland, Italy, Greece, and Spain). Spaniards are fleeing to precious metals, Greeks are moving rapidly into a barter economy while the threat of gold confiscation from Germany and other lenders hangs over their future bailouts, and in Italy, the Guardia di Finanza (Financial Police) are seizing control or portions of corporations, luxury cars and homes, and even searching the Vatican in search of tax dollars and alleged criminal activity including tax evasion. While many readers might ask the question as to what this has to do with the United States, take a look at the situation with our budget deficits and wonder just how long until it will be until restrictive measures on gold, silver, and other valuable assets will be monitored and seized to fulfill budget shortfalls and appease our overseas creditors.
The natural result of all of the events in Europe has been the development of a thriving black market which is requiring more laws, regulation, and of course, jack booted thugs to enforce all of the new, nightmarish tax collection schemes. The United States however has found an alternative program which is much more efficient by hiring the thugs first for enforcement, then planning on a series of legal maneuvers later on to impose further controls on the citizenry. This too will eventually lead to a new black market, one where there will be no floor to the price nor ceiling, as the universal tender of the world might indeed become priceless; that being the trade and purchase of precious metals.
The government’s first subtle attempt to impose regulation was a dramatic failure thanks to the internet and active political lobbying by the industry. If Obama is re-elected however, look for a series of executive orders and regulatory agency policies which will restrict the ability of dealers to purchase and sell .999 silver and gold bars and coins, along with other bureaucratic programs designed to enforce monitoring of transactions to prevent “money laundering” or “tax evasion” which are based on existing law. These types of provisions will be used in the proverbial “war on terror” and war on the wealthy in an attempt to attack those who believe on Constitutional money on several fronts:
1. To impact advertising dollars for major Conservative talk radio programs and hopefully starve their programs off the air.
2. To create an implied capital gains tax which can be imposed on unrealized gains for “registered” precious metal owners and collected annually from average taxpayers and perhaps quarterly from precious metals dealers.
3. An anti-fraud provision to reduce the transactions of counterfeit silver and gold coins (now rampant) and hold dealers, not the smugglers responsible for failing to report the receipt of or sale of allegedly fraudulent coinage. This will have a chilling impact on the ability and willingness of dealers to purchase ninety percent U.S. coinage, .999 American coins, or foreign precious metal based coins.
4. To expand the tax collecting power of the IRS on estates thus preventing “Grandpa’s collection” from ducking estate taxes believed due to the Federal government and the states.
5. To force investors from swapping fiat currency, in other words the U.S. Dollar, for real money and forcing even the most casual of speculators to participated in the great Wall Street Ponzi game.
The fictional “Form 666″ highlighted as the thumbnail for this article is quite tongue in cheek but in reality there has been an assault on real money since FDR launched his infamous and un-Constitutional executive order in 1933. As the fictional Keynesian prosperity ruled the nation for decades and American power was unchecked around the world, the issue of private citizens owning gold and silver was dismissed as the realm of survivalists, conspiracy loons, and collectors. Now that our nation is facing the prospect of a hyperinflationary era thanks to irresponsible banking and political officials everyone who can purchase precious metals has been doing so since the collapse started in 2008. Eventually the system will crash and all bets are off as to how the regime would respond to a second, more economically lethal implosion and that is why planning for this eventuality is critical to the precious metals investor and dealer.
Because when all is said and done, a black market in gold and silver will flourish in this nation as it is now over in the troubled nations of Europe. Gold and silver are natural reserves in times of economic and political strife and provide average citizens freedom of movement and commerce during these periods of turmoil. This means that freedom must be eradicated at every level for the State to succeed. The problem here is that the government appears to be preparing for such an event by imposing a police state first before taking the economy down to its predetermined destruction and reconfiguration. Prepare your assets accordingly.