[quote=Doug]This is a central failing of your reasoning.[/quote]Not really. You said, “I’m not interested in hearing about all the wonderful preparations you can make with that cash, I’m already there.” and I said (including new emphasis), “If you’re all set”. If you didn’t mean you’re all prepared then my “if” becomes irrelevant and we revert back to the argument between buying PMs and preparing. If you are, indeed, all set, then my reasoning is sound. If there is no more that you can do to prepare then any savings you have are excess to requirements, though, of course, you may still have taxes to pay and I’ve covered that. You make the point about being able to buy in what you need, if you and your family become incapable either of looking after yourselves or of bartering for what you need. But the PMs, if they are accepted in exchange for goods and services, will run out at some stage, either in your lifetime or your family’s lifetimes, unless your family can start providing something that other people need - in which case you could always barter than sell.[quote=Doug]Your dismissal of the value of financial assets in general and PMs specifically is frivolous and lends no credibility to your argument.[/quote]Only if your PMs will allow you to do what you say they will. Neither you nor Chris knows that (not that Chris mentioned your proposed use of your PMs, as far as I know). I don’t dismiss financial assets; they can be very useful in preparing for a very different future by becoming as self sufficient as possible.[quote=Doug]Remember, practices like barter are technically black markets.[/quote]Sorry, I don’t see that, either in the current society or after collapse. Barter is direct exchange of goods and services, instead of through some intermediate mechanism, like money or gold. I don’t think I’ve heard of barter being taxable currently, though I wouldn’t put it past governments or dictators to try to do so, in some way.[quote=Doug]As gov’t practices become more confiscatory, people will find alternatives and substances of traditional value will come to be useful in those markets.[/quote]Providing governments don’t confiscate those substances. Skills will always have value and governments will find it very difficult to confiscate those.
[quote=Ready]and we are now debating whether or not savings (of any kind) is a good thing (seriously??? )[/quote]No, we’re not debating that, in as stark a manner as you’ve put it. I hate that way of debating - a bit like a straw man. Savings are a great thing to have now. But what is their purpose, especially as we’re facing a very uncertain future (though certain in some key ways, since our behaviours are unsustainable)? Some have claimed it’s sort of an insurance policy but where the insurance company is not guaranteed to pay out. Others seem to view savings as a delaying mechanism, to prolong the time before they really have to fend for themselves.Savings today are a good thing to have but only to spend on preparations (though I admit that there are many ways to view those preparations).
[quote=tictac1]gold will not somehow be worthless this time around[/quote]I’m not sure that anyone said it would be. Whether you can physically use it in the way you might imagine is another matter. It’s questionable as to whether PMs will be a common enough means of exchange to make it a useful commodity to hold. The masses will probably be bartering rather than exchanging gold coins or slivers.
I guess I was “cleansed” along with the religious comments. Ok with me.Tictac1, there’s a difference between placing precious metals and their ownership in a context and proselytzing. The Crash Course is a secular course. Chris very carefully made it so and is therefore conceptually accessible to everyone without interference of, or minsinterpretion by, religious dogma.
There are thousands of religious websites, especially religious preppers, who might welcome those with a religious interpretation of the Triple E predicaments we face. On this thread, such intrusions have proven to be just that, intrusions, and diversions, as you’ve seen.
At the risk of having my comment cleansed, I won’t answer your musing out loud about why people are offended by Christianity. Books have been written.
I am certainly concerned that my PMs will stolen by some manner of government finagling or intervention and that I will be penalized, not rewarded, for my economic caution. They have thrown savers and retirees under the bus and saved bankers for the past several years and I assumer that they will throw precious metal owners under the bus to save the bankers in the future.
I’m all ears for suggestions from, as you noted, an astute group. I don’t believe that a Swiss gold account accessible by a neat ride in my Gulfstream is in the cards for me, as many "poser’ gold mavens who publish newsletters so smugly suggest.
CS
@tictac1 You are right, black market opens up at the moment the gov. become too invasive… so they will get nothing if they try to tax too much.
You can take my word for it… I lived in a socialist regime …Just to clarify nobody was allowed to have a company and bussiness everything was nationalized… Yet almost everybody was doing favors/work for anybody else on the black market w/o giving a dime back to the corrupt government. And socialist regimes were more totallitarian than the current Western democracies at least for now…
The same thing happens everywhere it is human nature… and when the government try to inflate blatantly people will just switch to whatever, doesnt have to be gold and silver !! But most probably will be.
Did the prohobition stopped selling alchohol, no it made it more profitable to whoever took the risk to smuggle it…
>>On grey/black market value of gold, it’s been said that the illegality of trade would lower the price. While this makes some sense, I cannot think of any other item that gets CHEAPER on the black market.<<Not necessarily, In my country back in the days… the official exchange rate of the $ was 1:1 but on the black market it was 1:3 (3 times more expensive). There was this subtlety of course, not everybody was allowed to exchange or have $. Talks about the stupidity the gov can come up and also you can’t change human nature with fabricated laws that make no sense.
So it depends.
For sofistek: bartering without paying taxes is most definetly illegal in the U.S., as is trading labor for labor. I can get you IRS code if you need it, I just don’t have it handy right now. Interestingly, the IRS says you have “no basis” in your own labor, i.e. it is worthless, until you go to trade it, of course. That’s why any money you make through your labor is 100% taxable.
Based on recent history, I think we should all plan on governments furthering their looting of the public in favor of powerful banking interests. World-wide corporate socialism, if you will. This might mean taxing or otherwise regulating your PMs into near worthlessness, IF that means saving their bacon. Again, though, this presupposes a compliant public to make it worthwhile on a large scale.
The last time gold was confiscated, the general atmosphere was very different. I think the public had a basis of trust in the US government, something that does not appear to be so at this time.
I don’t think anyone should see PMs as the end-all, be-all of self-sufficiency. I doubt anyone here does. They are merely one way to preserve wealth, an insurance policy. Another wise investment might be tools of various sorts, and learning the skills to use them effectively. For example, a generator/TIG/stick welder might cost you a few grand, but it can easily be made to pay for itself many times over if you know how to use it.
Diversified income streams, in addition to a variety of wealth preservation/investment vehicles, is about the best you can do, financially.
For those that believe PMs are a bad idea, I would ask this question- if that is so, why are banks reversing course on holding gold, and buying? If PMs are being manipulated upward, wouldn’t banks be reducing their holdings to take advantage of the “bubble”? My WAG is that central banks are quietly preparing for what they see as a forgone conclusion, the eventual collapse of the US dollar. I don’t see a gold standard arising from this, though. I see another fiat. It’s the only way “the game” of robbing the masses through wealth destruction and confiscation can continue. I welcome retorts to this idea, however.
Historically, this does not bode well. The masses get violent when “class warfare” comes to a head.
I also agree we will end with another fiat/s… no way out of it (expandable electronic money are better lubricant for world trade than commodity money)… It can even be more abstract like the SDR for the interbank backbone (Then the bankers can play even more games). Any gold standard scheme is doomed to failure too.sofistek: Gld holding is not for trading and day to day transaction. But a way so you can go trough the crisis on the other side with preserved purchasing power.
Well, you are right about one thing, WE are not debating that. Apparently you are debating it with yourself across posts.
Cheers,
Strawman
I should have added that there are exemptions of certain barters from the requirement to file a 1099-B:
http://www.irs.gov/businesses/small/article/0,id=188094,00.html
[quote]
Barter exchanges, whether Internet based or with a physical location, are required to file Form 1099-B for all transactions unless certain exceptions are met. Barter exchanges are not required to file Form 1099-B for:
-
Exchanges through a barter exchange having fewer than 100 transactions during the year
-
Exempt foreign persons as defined in Regulations section 1.6045-1(g)(1)
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Exchanges involving property or services with a fair market value of less than $1.00[/quote]
- Not very comforting.
- Doug
Keeping their jobs in such a storm is a powerful incentive.
Doug
The turnover rate for field agents is very high. For some reason, it’s not a very nice place to work…:) Some agents that quit go on to be anti-IRS crusaders. The IRS operates illegally much of the time, and for some reason, there’s no recourse.
Doug wrote:Remember, practices like barter are technically black markets,
http://www.irs.gov/taxtopics/tc420.html
[quote]
Generally, you report this income on Form 1040, Schedule C (PDF), Profit or Loss from Business. If you failed to report this income, correct your return by filing a Form 1040X. Refer to Topic 308 for Amended Return information.
A barter exchange or barter club is any person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis.
The Internet has provided a medium for new growth in the bartering exchange industry. This growth prompts the following reminder: Barter exchanges are required to file Form 1099-B for all transactions unless certain exceptions are met. Refer to Barter Exchanges in Publication 525, Taxable and Nontaxable Income, and the instructions for Form 1099-B for additional information on this subject. Persons who do not contract a barter exchange but who trade services do not file Form 1099-B. However, they may be required to file Form 1099-MISC. If you are in a business or trade, you may be able to deduct certain costs you incurred to perform the work that was bartered. If you exchanged property or services through a barter exchange, you should receive a Form 1099-B (PDF), Proceeds From Broker and Barter Exchange Transactions. The IRS also will receive the same information.
Please refer to our Bartering page for more information on bartering income and bartering exchanges.
If you receive income from bartering, you may be required to make estimated tax payments. Refer to Publication 525, Taxable and Nontaxable Income, for additional information.[/quote]
So, if you haven’t reported your barter arrangements, you are running afoul of IRS rules. It isn’t very strictly enforced, but it can be at the whim of the IRS. Remember, there is no more powerful agency of gov’t than the IRS. Going forward, we should assume every financial agreement (whether involving currency, commodity or services) is potentially a taxable event and we are functioning in at least a gray if not black market if we ignore the tax consequences. Paranoia is a healthy reaction to such a financial environment.
Doug
Default will affect my gold ownership. I’m a saver and not a borrower. It seems to me that two consequences of default, among many, maybe, would be a surge in interest rates and in the price of gold. I think I would sell my gold into that rally and put the money in CDs, which undoubtedly would also go WTF up with interest rates. After TPTB figured some way to redo the system and get back to the business of screwing us as usual and interest rates and gold went back down, I’d stay in my high interest CDs and use some other cash to buy back cheaper gold.A reasonable plan?
CS
[quote=capesurvivor]I think I would sell my gold into that rally and put the money in CDs, which undoubtedly would also go WTF up with interest rates.
[/quote]
What if the currency that your CDs are denominated in goes to zero? It doesn’t matter what your interest rate is. At this time in history, I think I would not worry about gain and only about preservation of wealth.
If U.S. currency actually went to zero, wealth preservation would be the least of my concerns probably.
SG
[quote=capesurvivor]If U.S. currency actually went to zero, wealth preservation would be the least of my concerns probably.
SG
[/quote]
Steve -
You could use 1 ounce gold bars in a slingshot???
Not against tanks!CS
[quote=raptor]sofistek: Gld holding is not for trading and day to day transaction. But a way so you can go trough the crisis on the other side with preserved purchasing power.[/quote]So you see the crisis as some temporary blip where the other side of it will have markets functioning like today? There seem to be two lines promoted here, for holding PMs. One is to preseve wealth until one is in a position to use that waelth for preparations. The other is to hoard it for some uncertain future but where one is certain that it can be used to trade in lieu of physical goods or services. Now you seem to be adding a third, whereby there is some other side of this crisis where everything will calm down and, whilst many parts of society may be changed, you will still be able to sell PMs for some means of exchange and have expectations that the PMs will continue to hold their value during your lifetime (or perhaps your family’s lifetimes).The least gamble seems to be the first position but then it would be a short term position and I don’t think Chris often espouses PMs for the short term, though he has encouraged sale of some portion of holdings if required to complete preparations. However, most advice is for a long term hold and that is where I simply don’t see the reasoning. In a world that will probably see collapse or some stages of collapse in the lifetimes of everyone here, I don’t see the benefit of holding a largely useless material simply in the hope that it will enable its holders to think they are wealthy as society collapses around them.
Tony
[quote=Doug]http://www.irs.gov/taxtopics/tc420.html[/quote]OK, Doug. Fair enough. In the US, it’s illegal (bizarrely). Maybe it’s illegal anywhere, then, though I don’t recall reading or hearing that before. I don’t know if it’s illegal here in New Zealand. However, we’re talking of the future here, during and after collapse. I can’t see how taxing or avoiding bartering can be enforced in a world where most people only have goods and services to exchange for other goods and services. I don’t see gold and silver as a means of exchange being common. That’s my point. There will be haves and havenots but what difference does it make to survival and quality of life?