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Captial Gains Tax Charged on Gold Profits

Commodities / Gold & Silver 2009 Jul 02, 2009 - 04:24 PM GMT

By: Adam_Brochert


Best Financial Markets Analysis ArticleCapital Gains on Gold are punitively taxed at a higher rate than stocks or other investment capital gains, as they are treated as "collectibles." This is yet another way the government discourages Gold ownership and forces people to accept their intrinsically worthless paper tickets. Forcing people into the fiat casino so that they can be stripped of the fruits of their labor is the heart of what Gold Versus Paper is against.

A Senator Michael Crapo is sponsoring a new bill to change the capital gains treatment on Gold and other precious metals investments. Gold capital gains are currently taxed at 28% and the bill seeks to lower the capital gains tax rate to 15% as with other long-term (i.e. held for more than 1 year) investments like stocks.

Reducing Gold to "collectible" status is another subtle method the fiat statists use to debase the reputation of Gold. The attempts to demonize, trivialize and de-monetize Gold in a fiat system are paramount to the fiat system's success. Why would anyone accept the paper promises of bureaucrats and/or banksters except under the threat of force (i.e. law) or extreme desperation? Paper tickets that can be created at will with no effort or the truest and longest-standing form of money that has been accepted by humans for thousands of years and cannot be debased by those who run the debt/printing presses? Hmmmm. Tough choice but I think I'll choose Gold for at least a portion of my savings.

As our fiat economic system swings from wildly inflationary times to deflationary busts, only one thing is certain: the swings keep getting wilder and wilder and will continue to do so as long as we remain in a fiat currency system. Through it all, Gold just sits there as an anchor of stability. It won't make you rich other than through perfect timing of your trade(s), but it will protect your savings from the wild swings of the rigged paper casino in which the entire world now finds itself. This is why the Dow to Gold ratio chart looks like an expanding megaphone pattern ever since we handed the debt press keys to the private, for-profit federal reserve corporation.

Just like in a casino, there are some big winners among the patrons, but the owners of the casino (i.e. those who run the fiat debt presses) always come out ahead. By putting some of your money in physical Gold held outside the system, you are siding with the owners of the casino. You see, they hold more Gold than anyone because they know the secret.

And what is that secret? Gold cannot be effectively demonetized by decree for any significant length of time. The cycle of asset inflation has swung back the other way and those who hold the Gold sit patiently like vultures. Once the collapse is complete, they will use their Gold to buy up the assets of the world for pennies on the dollar and start the next round of the game all over again. Those who sit in fiat cash waiting out the debacle should do well unless they pick the wrong paper currency to ride out the storm. Pick the wrong currency and you may lose everything (or at least 30-90% of everything) with the stroke of a government pen.

Gold will retain its value during this collapse. If you think you're smart enough to trade this bear market, I wish you luck (and I'll be trading along side you with a significant portion of my capital). Don't think of Gold as a get rich quick scheme, think of it as the vultures' asset of choice. Be like the casino owners and you're sure to come out on top. Put a portion of your assets into physical Gold and sleep well at night knowing you can never be wiped out.

Risk is high and will remain so for at least the next year. Gold stocks will be the go to speculative asset class for those with a bullish bias but are not immune to steep corrections, whether due to normal bull market resting periods and/or bear market legs down in the general stock markets. Later this summer and fall there will be wonderful buying opportunities in the Gold mining sector.

Visit Adam Brochert’s blog:

Adam Brochert

BIO: Markets and cycles are my new hobby. I've seen the writing on the wall for the U.S. and the global economy and I am seeking financial salvation for myself (and anyone else who cares to listen) while Rome burns around us.

© 2009 Copyright Adam Brochert - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


david welch
25 Jun 10, 16:20
in spite of tax, gold is still betting most investments

gold in june 2009 was 1050, june 2010 gold is 1250

i would rather have 72% of something than 85% of nothing

Shelby Moore (author of "End Game, Gold Investors Destroyed")
25 Jun 10, 19:47
Silver can't be taxed more than gold?

Your article speaks directly to my article, End Game, Gold Investors Destroyed:

Indeed in further discussion, I admitted that one person was able to point out that by holding gold we would do better than anyone else in society holding paper investments, but we would still lose ground relative to the elite who don't pay taxes on their gold:


> Your scenario might not actually punish gold investors severely at

> all. Say you buy $100k in gold today. Then there is hyperinflation.

> After, if things come to pass as you suggest, you will be able to sell

> you gold and earn a real 20% after-tax interest rate. So even if taxes

> are 50%, you sell your gold, end up with $50k purchasing power in the

> new currency, and after 4 years of compounding at 20% you're back at

> your original $100k in purchasing power. How high would you expect

> capital gains taxes to go?

Excellent point! I commend you, this is the first point that really challenges my thesis.

Make that 80% tax and then you need 9 years just to recover (but if we have deflation then won't take that long and interest rates may be much higher). But I think the masses who have no gold are going to support media pitches to cut gold hoarders down to average poverty level like everyone else. I think the banksters are going for a near complete wipeout of the $millionaire class. There will only be 2 classes, us and them. How high? Well lets see, the entire western world is net debtors (no net worth) and 30+% are demographically old and can't work too hard.

You have a strong point there. After all, everthing is relative. If everyone else is getting more poor (except for the banksters), then we are only falling behind relative to the banksters, not the general public.


I think people don't understand that this fiat system death will actually give more power to the elite who own most of the world's gold, because they won't pay taxes on their gold when they acquire assets for "pennies", but we will, due the lust for compounding and usury (theft from society that everyone will want to participate in, i.e. socialism "let's gang up to steal from ourselves" is human nature):

(see my comments at bottom)

And you wonder why the elite see us as stupid? We (society) gang up to steal from ourselves through our lust of compounding and usury (Great Harlot).

Note that in subsequent discussion, we deduced that silver will outperform gold and that silver will not likely be taxed at higher rates than gold:

I had also explained factually in my forum why silver is the Achilles heel of the elite. You can start with the fact that the annual supply of silver is a fraction of that for gold, and the fact that the elite do not own the silver (most of which can not come to market for less than $100s per ounce):

Thank you.

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