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The silver
market is several orders of magnitude too small for the U.S.
government to even be concerned about. It is impossible that the U.S.
government could confiscate enough silver bullion to even make even the
tiniest difference to the annual budget!
The total silver
bullion available in the entire world is down to about 60 to 600 million
ounces. At $20/oz., that's worth $1.2 billion to $12 billion, yet U.S. annual
government budgets are around $3000 billion, and the
deficit alone is about $1000 billion. How could $1.2 billion dollars even
help in the slightest to help fund a budget deficit of 1000 billion, nearly
1000 times as large?
Thus, there is
no need to be remotely concerned about confiscation until well after silver
bullion rises in price by at least a factor of 1000! And even then, the
silver in the U.S., about 100 million ounces, at the COMEX, would be worth
$20,000/oz., for a total of a mere $2 trillion, which is, again, a mere drop
in the bucket when considering the dollar amount of government expenditures,
which are over $3 trillion, and the U.S. debt is $9 trillion, with unfunded
liabilities of $75 trillion!
Furthermore,
let's look at the gold confiscation of 1933. In actual fact, the vast
majority of people never turned in their gold. The government increased
their own gold hoard by only 1% through confiscation, so you are not likely
to lose your silver if the government even tried to confiscate.
Furthermore, of
all the assets available, gold and silver are the absolute hardest to
actually confiscate, because they are easily hidden, portable, off the books,
and are essentially untraceable. That's why they are money, because of
such intrinsic properties.
In contrast,
Real Estate is much easier to tax. There is no such annual "property
tax" on silver or gold.
In fact, you may
need physical gold or silver to be able to hold on to real estate in the
future. If paper money collapses, they will surely levy a tax of gold
or silver on all real estate.
So, although it
is always possible that the government might confiscate silver in the future,
I think the possibility is rather remote.
The typical
result in history when governments try to confiscate gold and silver is that
the governments quickly collapse. It is an anomaly of history that the
U.S. government did not collapse in 1933, but perhaps the reason it survived
is that paper money could be redeemed for gold by foreigners until 1971, and
perhaps because gold trading was legalized again in 1975.
But more
importantly, let's focus on the present. They are not confiscating
silver now.
Today's
government confiscation takes place through inflation! Currently, money
creation rates are at about 20%, so inflation is 20%, and thus, the dollar
will lose 20% of its value in a year. In the last 4 years, the dollar
has lost over 75% of its value (as measured by silver and gold, since gold
and silver prices have nearly quadrupled), and the dollar is on pace to lose
another 20% in the next 12 months!
Another
government confiscation is through income taxes. There were no income
taxes in the U.S.
when silver and gold were money, prior to 1913 when the Federal Reserve was
founded.
Confiscation
fears are understandable. Although silver that you own is default free, and
cannot go to zero value. But there is only one remaining problem: it
can be stolen by thieves, or government. This is the age-old problem of being
wealthy, you have to protect your wealth.
Let me
emphasize, you have to protect your wealth, you, not somebody else. Like
many activities, we often try to hire out jobs we don't like. We hire
people in government to be the police, to fight fires, and to build
roads. In the private sector, most of us hire other people to build our
houses or cars for us, as the vast majority of people work in other jobs.
But it can be dangerous if you hire other people to protect your wealth for
you. Every such hired person has a great temptation when placed in that
position.
Let's put it
this way. You don't ask another man to hold your wallet, and you don't
ask another man to hold your wife. Some things are your responsibility
only.
You can hire a
personal trainer, but you cannot hire another person to exercise for you,
either.
You can hire a
driver, but you can't hire someone else to take your test to get your
driver's license.
Some things you
just have to do yourself, and guarding your wealth is one of them.
Guarding your
own wealth serves several positive functions and purposes for society and
you. First, it distributes wealth among the people, rather than
allowing it to be concentrated, and more easily stolen by thieves or
government entities. Second, it forces you to take more responsibility
for your direct surroundings, such as where you live, which directly
contributes to helping make the world a safer and better place. Third,
you will be more likely to take precautions for overall home defense and personal security, such as getting a burglar
alarm system or firearms. Fourth, you are more likely to want to keep
yourself physically fit and ready for personal self defence, which is good
for your health. Fifth, a people that owns
firearms is more likely to be free and more immune to invasion by any
enemies.
So, if there
ever was any sort of government confiscation order, who would mostly likely
be harmed? Primarily those entities who would be affected would be the
investors who held silver or gold with the exchange traded funds (ETF's) such as Barclays SLV, or e-bullion trading
systems, or the COMEX, or any sort of silver or gold held for you by any
major broker or bank.
In fact, if
there is any silver or gold confiscation order, it would likely be to help
the banks, to eliminate the silver and gold liabilities of the major banks
and brokerage houses, so that they can give you paper, instead of silver or
gold, in case the prices of the precious metals begin to take off.
Some people say
that places like goldmoney.com which is incorporated overseas and uses vaults
in Europe, is immune from U.S.
government confiscation. Others say that Australia's Perth Mint
certificates are also likewise immune.
But the lesson
of the Argentina
currency crisis in 2001 should be remembered. U.S. Citizens who put U.S. dollars in U.S. banks in Argentina had their dollars
converted to Argentine pesos against their will, and lost 75% of the value of
their accounts nearly overnight as the Argentine peso collapsed by about that
amount. U.S. Banks said they had no choice but to obey the orders of
the government of Argentina,
which was, of course, very convenient for them!
http://en.wikipedia.org/wiki/Argentine_econom...sis_(1999-2002)
So, being
located in another nation does not always offer protection.
Freedom requires
responsibility.
Banks offer a
false kind of security.
Those who would
give up responsibility for security deserve neither one and will end up
enslaved.
Those who mock
silver and gold love to tout stories of people who had their silver or gold
stolen by common thieves.
At most, I could
hardly conceive that 1% or less, of the people's physical wealth could be
stolen, physically, in a year!
Yet what is
inflation? Inflation of 20% steals 20% of all of society's paper wealth
in a year!
The irony is
that paper money's "reason for existence" is that it's supposed to
protect us from the theft of physical bullion, but paper money is no
protection at all! Paper money is evidence that you and your ancestors
abandoned your silver and gold to the institutionalized thieves long ago.
Could you
imagine the societal uproar that would happen if 100% of the assets of 1
person in 5 were totally stolen each year by thieves? And yet, that is
the societal equivalent of a 20% inflation, or currency devaluation!
If you are going
to fear confiscation, then fear inflation, for that is the real confiscation.
In fact, fear
paper money, for paper money was created to deceive the holders of the
physical gold and silver in the first place. And also, fear the entire
concept of banks, for banks are also a mechanism of confiscation! Fear
also, insurance, social security, annuities, inflation-indexed bonds, futures
contracts, and options. All are merely "promises to pay", and
are all paper instruments designed to confiscate your real gold and silver.
The only
solution to the problem of confiscation is getting real silver and gold.
Some scammers
will try to convince you that "numismatic" items are immune from
confiscation. Whatever! I think numismatics are just another form
of confiscation themselves; they are expensive idols, special images on coins
that supposedly have higher value, but the value is to the seller of the
items, as they usually have a very large spread, and you get much less back
when you try to sell them. Even if you get "cheap" numismatic
coins for only 15% over spot, I reason, why pay 15% more for
"special" bullion, when you can pay 5% just to protect the real
stuff?
I know a guy who
spent $150,000 on "walking liberties" at 75% over spot! He
only got the spot price when he sold them! Most people
who try to spend $100,000 in the rare coin market, ARE the rare coin
market. Beware!
I recommend that
you store your wealth in a safe, in your home. Bolt the safe down, from
the inside, into concrete or wall studs. Get a safe that is an
appropriate size for your wealth. Buy a $50 lock box, or a $500 floor
safe, or a $5000 vault safe if you have to. A good rule of thumb is to
spend about 1-5% of your wealth on personal security.
If you have
wealth, you can afford to guard it, or you can afford to move to a safer neighborhood, it's that simple. Don't neglect that
crucial responsibility.
Don't try to
insure it, I think insurance is a scam, and I don't even know if you can
insure bullion stored at home. One way to insure your wealth is to
spread it around. Do you have family? Buy them a few safes, and
store wealth with them.
Finally, some
people have asked me, "What if a crook comes to your house with a gun,
and forces you to open your safe?" What if, what if! It's
never happened yet. Common thieves don't read investment newsletters, they are out for the easy score. Most
silver and gold thieves disguise themselves as "respectable"
businesses who want to hold your silver and gold for you!
Besides, that's why I have gates, guards, dogs, security alarms, safes, and
firearms, and I've diversified. But the reality is that I know my life
is a temporary thing. I'll be gone in about 40-50 years if I'm blessed
to live so long, and my silver will be there for my children or my children's
children. But more importantly is how I live my short life; shall I
live it in fear, or shall I take responsibility?
Sincerely,
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