07 August 2011

A cartoon that should concern all PM investors

The cartoon below (h/t Nathan's Economic Edge) is a warning to gold and silver investors.

Instead of focusing on how and why there are no productive investment opportunities, the cartoonist demonises the cash "hoarder". Yes, you must spend your cash to help pull the debtors out of their problem. If you won't, then next they will charge you to hold cash - see BNY Mellon's negative interest rates. By the way, if that did come to pass it would be amusing because one of the (mis)criticisms of gold is that it costs to hold it and it doesn't pay a return - well if more banks copy the BNY Mellon action then neither will cash.

Demonisation is what PM investors can expect as metal prices increases - you will be classed as rich hoarders. Hopefully it stays at that, rather than degenerating into a "super PM profits tax" or confiscation. However, one shouldn't underestimate the politics of envy and thus keeping an eye on which category the majority of voters sit would be prudent (FOFOA's The Debtors and the Savers worth a read in this respect).


  1. Yeah, except just what is this 'ready cash', recently downgraded T-bills? Deposits with government 'guaranteed' banks?

    Mr Capitalist Pig might find his bag empty when he looks in it.

  2. ' "super PM profits tax" or confiscation. '

    Unless the tax can somehow be imposed worldwide, it won't work. Europe has already figured out why you don't tax gold.

    AFA confiscation is concerned, I expect if attempted, gov't will find that almost all the small caches of privately held gold was 'sold' and the money 'spent', the larger caches will be outside their jurisdictions.

  3. Another thing to consider is that much of the 'ready cash' is pinned overseas by US taxation law. To bring it back in country requires paying a 30% tax on it, so large corporations just leave it overseas.

  4. "As such there is an inherent danger and opportunity in holding gold. It is value which cannot be taken through debasement. It allows you to stand apart from the masses who lose a percentage of what they own every time more currency is injected into the system. In standing apart, you assume your own responsibility regarding how you choose to help those who cannot bear the losses they have suffered. There are times when to be seen not to be ‘chipping in’, will not be tolerated."

  5. The picture is missing one thing - a golden anchor for the boat or a comment about it. :o)