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The Golden End Game – A Thought Experiment - Part Two
The Golden End Game – A Thought Experiment
Part Two of Two
By
Cognitive Dissonance
With limericks by The Limerick King
This is part two of a two part exploration (part one can be found here) into what the world might look like after a total or partial collapse of the currency/economic system from the perspective of holding Gold. As the title explains this is a thought experiment, not a dissertation filled with footnotes and references. Consider it one man’s flight of fancy, so take what you need and leave the rest. Anyone who claims they actually know what will happen is definitely a fool greater than me.
As markets are starting to sink
The end could be here in a wink
So should I prepare?
Should I even care?
My PMs will save me!!! (I think......)
(The Limerick King)
As a reminder of something emphasized in Part One, I am discussing a worst case scenario here. So please keep this in mind when your brain synapses start firing and you feel compelled to stop reading and fire off a nasty comment. There are thousands of lesser scenarios that could play out here as opposed to only hundreds of worse case scenarios. What you find below are just my thoughts on the matter, not fact or even hard opinion.
In addition, this essay isn’t directed towards the small PM ‘investor’ who owns ‘small’ amounts of Gold and Silver, for example under 20 ounces of Gold and several hundred ounces of Silver. Nor is it directed towards the whales, those who can purchase and safely store (preferably offshore) several hundred or even thousands of ounces of Gold. They have similar problems as everyone else, but much more flexibility. Rather this essay is directed towards those solidly middle class people who are converting their ‘wealth’ into Gold and Silver, even going so far as to cash out their qualified retirement accounts (IRA’s, 401(k)’s and qualified annuities) or mortgage their property in order to increase their Precious Metal stash.
I see and hear a great deal of cognitive dissonance among those who promote Gold as the way to salvation, all while ignoring or dismissing the idea of governmental confiscation of said Golden chariots. It’s not like doing so would be totally unprecedented in the US (or on other plantations for that matter) since President Franklin Roosevelt’s April 5, 1933 Executive Order 6102 did precisely that, promptly followed by a revaluation of said confiscated Gold to push the anal probe that much further up the rear.
What everyone seems to forget is that the United States is not the only plantation bleeding from every orifice while simultaneously ripping open new ones. This is a global party we’re throwing here and everyone who is anyone seems to have accepted the invitation, something many are beginning to regret as they desperately click the ‘un-send’ button. Actually this isn’t true, since we already know that the blue blood families play all sides against each other, then turn things around and transform former arch enemies in lifelong best girlfriends, the only way this global Ponzi could have progressed to this point in the collapse countdown.
I guess my point is simple. Today’s (global) disaster isn’t Argentina from 1989-1990 and again in 1999-2002. Nor is it Zimbabwe from 2004-2009 or even the Weimar Republic from 1920-1923. While the rest of the world was also (more or less) suffering during those turbulent times, Argentina, Zimbabwe and the Weimar were islands of disaster in a world of relative stability.
The Kleptocrat game is not chance
It resembles a well-rehearsed dance
With lifts, dips and spins
Until treachery wins
And the middle-class shits in their pants
(The Limerick King)
Remember that almost by definition disaster recovery requires relative normalcy somewhere nearby as the staging area from where you send in the life lines and supplies, as well as a place to evacuate the wounded. So when Norman, Oklahoma suffers a devastating tornado, help comes rushing in from 10-500 miles away. But what happens if the entire country is simultaneously ravaged by natural (Ponzi) disaster? Where does the help come from then? Overseas? But they are running the same Ponzi as we are here. So if we go down, they go down just as hard if not harder and vice versa.
One of the staples of the Armageddon genre of disaster porn is the notion that, in a national/global disaster, there is no safe harbor from which to coordinate and launch the rescue ships. Thus everyone goes into survival mode and if you aren’t helping yourself then no one is. Social rules of order and decorum are quickly abandoned for survival of the fittest and suddenly it is game on Mad Max style. Ironically if you remember the original Mad Max movie, it begins shortly after a terrible global disaster. Max was one of several cops working with the ‘authorities’ in an effort to maintain some type of order in the rapidly decaying remains of society. It was all downhill from there.
In response to those who would disagree with my line of reasoning by saying, “CD, you can’t compare a global natural disaster, where there is infrastructure damage, to an economic collapse, where at least initially all infrastructure remains in place and functioning” all I can say is that I disagree. The active ingredient in my analogy isn’t the level or type of global devastation as much as the equality or uniformity of it.
External rescue requires a more or less untouched area that contains a surplus of resources, financial or otherwise, and the means to organize and deploy them into the underserved disaster area. Because the Ponzi disease is globally and uniformly distributed around the developed world, in the event of a total or partial collapse, essentially there are no substantial surplus resources that can be gathered and transported from one area to the next. Everyone is in the same degraded condition. Well……actually there are ‘excess surplus assets’ available after a global economic collapse. Those assets are called the people’s Gold. But we’ll get to that in a moment.
So any rescue or recovery can only come from in-place assets and organized systems such as the existing military and governmental bureaucracy. Thus other than some shifting of leadership positions to create scapegoats and dispel slave anger, not much will change unless an armed and organized revolt is mounted. While that might eventually come about, it will not initially, thus allowing the military to disperse and dissolve any pockets of semi-organized resistance or even to prevent states from seceding so that they may create their own economic systems and/or preserve local and regional natural resources.
So who could have guessed Marx was right?
That the Bourgeoisie class is a blight?
All our wealth they will take
While they let us eat cake
We are slaves who must stand-up and fight!
(The Limerick King)
There seems to be a never ending stream of comments left on Zero Hedge that are short and sweet. Let it all burn to the ground baby so that we can rebuild it from scratch. I honestly think these people have no idea what that really means because in today’s world of massive financial leverage and staggering amounts of derivative contracts, too big to fail banks using 40 or 50 to 1 leverage and the majority of the slave population living paycheck to paycheck etc., burning it all down just might be an act of compassion compared to what would happen if it all just fell apart.
Anyone who doesn’t think martial law would be immediately declared and our remaining civil rights forcibly removed in the event of a partial or total economic/currency collapse has been brewing and taste testing their own brand of Kool-Aid. When order begins to break down, the existing power base WILL attempt to restore order and they won’t be gentle while doing so. And for the most part the plantation slaves will welcome the intervention because they have not prepared for the chaos, having ignored all the warning signs because they relied upon their masters to protect them.
So once again let us circle back to the principal question. What will you do with all that Gold and how will you reintegrate it into any new currency system that is implemented? During the first few hours, days, even weeks after the partial or total collapse, on a local basis you will be able to use your Gold (and especially your Silver) in small increments to barter for the goods and services you need to continue to live.
But very quickly, most likely the same day of the collapse, the government will announce draconian banking, price, wage and possibly even barter controls. And they will begin to implement unilateral decisions about what is needed where and when. If you have something the ‘greater good’ needs or wants and if others know about your good fortune, it could very easily be taken from you.
On a more practical basis, because the established control system will want to quickly put in place some type of replacement currency system, our Gold and other precious metals may actually escape any attempt at a quick governmental grab and go. But within days, and at most a week or so, global decisions will be made (correction: they have already been made, they will be implemented after a week) and in my opinion the priority will be to establish confidence in any new currency system or reestablish confidence in the old.
While one can’t know exactly how it will go down, considering that Gold and other PMs will probably have gone through the roof by this point, it is highly likely that Gold, along with other PMs or a basket of commodities (and possibly other new or old foreign currencies) will be used to back any new or renewed currency. The IMF’s so called Special Drawing Rights (SDR), essentially a global currency, is a perfect example of a cobbled together currency that might gain traction.
When HFT algos have ceased
And those who had most have the least
Is gold the best bet?
For a system reset?
Or will Banksters create a new beast?
(The Limerick King)
Now here is where I strongly suggest that, for several reasons, ‘they’ will feel compelled to confiscate Gold from the population. And this works on a global as well as national scale folks. The principal psychological warfare technique they will us is to vilify and scapegoat those ugly Gold hoarders and evil speculators. And there is no doubt in my mind that they will claim with absolute confidence and with concocted evidence that these evil Precious Metal terrorists destroyed the old system.
‘Truth’ will be immaterial at this point and actually counterproductive for those trying to beat back the resurgent Ponzi Hydra. Frightened people are not deep thinkers and they most certainly are not very reasonable. The emotional pain of collapse must be relieved, so any handy pain killer will be willingly ingested. History is replete with examples of this and a frightened and extremely angry slave population will gratefully latch onto the offered Gold hating piñata rather than soul search and examine their own role in the present disaster.
Depending upon the believability of various figures bandied about, less than one percent of the US population owns Gold as an investment (even less own the physical) and less than 2% own Gold miner shares. At the peak of the last Gold rush in the late 70’s and early 80’s I believe 8% of the US population owned investment Gold. Even if the present Gold love affair reaches that level of participation before the End Game commences, this group will still be a small minority and it will be very easy to turn the general population against them/us.
In addition, those who hold their Gold in bank safety deposit boxes or private vaults, at bullion banks or any other private, public or governmental storage facility will find that it will not be there for long. I suspect that the entities that own or control the facilities will be ordered to close their doors and to turn over the Gold. So even if we own Gold in ‘real physical’ fund companies such as Sprott, we will soon find that it isn’t available for withdrawal after the fall. And please don’t talk to me about the rule of law. We saw how the rule of law was respected when the US ran over the GM bond holders. Let’s get real here folks, under these circumstances the law is what they say the law is.
As well, plantation (country) borders will essentially be meaningless because every modern country will be in the same predicament. So the smart play for the new political puppets will be to cooperate with every other plantation (even enemies) to reenergize the system as quickly as possible. The precious metal mining companies will probably be nationalized, even if that just means that all of the output from the mines will be directed to the vaults of the ‘host’ plantation. China is effectively doing this now. So the only Gold you can count on is the Gold coins and small bars buried in the sand at the bottom of your fish tank.
Aside from the uncontrolled corruption and unrestrained fiat creation, if the old system collapsed because the general population lost faith in the financial system (ultimately the real reason behind any fiat collapse because it is not the unrestrained fiat printing, but the loss of public faith and belief the printing engenders, that destroys a fiat) and Gold in its role as the ultimate safe haven was the lightening rod that inflamed and focused that loss of faith, it will be incumbent upon the ‘new’ leadership to defuse and deflect any pockets of resistance to the new or reformed currency. By making a show of confiscating Gold ‘for the good of the people’ many non Gold holding people will go along with the theft because it essentially helps pull their asses out of the fire.
In effect the reckless and imprudent will cheer on the confiscation because backing the theft of others increases the chance they will be rewarded, or at least not severely punished, for their bad behavior. Moral hazard works wonders for the general population as well as the too big to fail. Because the general population can (and will) be stampeded when the crisis gets ‘real’, this will allow the political puppets to set up tiered currency conversion systems and unfair Gold and other PM reintegration rules. The rich will get richer and the poor will……well, you know. We will hear a lot of crying by the rich and powerful about how they just can’t put their glorious talents to work unless they receive special ‘incentives’. I just can’t wait to hear the imaginative sob stories of the down and out crony capitalists.
The dollar says, "In God We Trust"
But the dollar's about to go bust
So who betrayed whom
That has led to our doom?
(Twas the one who embraced greed and lust)
(The Limerick King)
While black and barter markets will most definitely spring up as they did in the 1930’s and 70’s, they might be less effective than they were back then unless we use them strictly for locally produced items and services. And even then I can see many problems and pitfalls. The one hope I have here is that the underground market for drugs and stolen goods will not go away because of the collapse, particularly since the new Ponzi will once again want to use (inter)national drug money to feed the beast. This might help to create pathways for black market currency to flow back into the main system which in return sustains the PM reintegration. We shall see if I am correct.
I see Gold and PM dealers becoming highly regulated and required under heavy penalty of law to report any and all relatively large PM transactions, for example anything over two or three ounces of Gold, thus effectively cutting off Joe’s ability to feed his or her Gold back into the system and extract or convert the wealth they tried to transport from the old system to the new. It can be done, but only very slowly and at considerable time, money and labor expense. And most importantly, with no free floating Gold market to set realistic prices, we will once again be robbed in broad daylight. They don’t need to ‘take’ your Gold, just take its value through price controls.
I expect that one of the national and possibly worldwide changes that will be implemented after the collapse and rebuilding of the financial system might be mandatory electronic fund transfers for things such as paying taxes, utility bills, mortgage as well as insurance and/or rent payments, payments to any local, state or federal agency or contractor as well as any large purchases such as cars, homes, businesses or anything else above an arbitrarily drawn currency amount.
Once these rules and regulations are introduced into the system, most retailers will follow the lead and refuse most or all cash transactions, preferring to use lower cost and more efficient electronic transfers. Expect a higher price or penalty to use cash (which you received when you sold your PMs) to purchase just about anything. Remember that a vibrant black market can only exist if there is a way to launder the proceeds back into the main system or if there is a parallel alternative currency system that fits the needs of the local users. This explains the need for drug and organized crime money to blaze a trail into the official money system. I have faith the new Ponzi will open that door for their own purposes.
Throughout history the key to forcing the public to accept new monetary and currency systems is to demand that all payments to the false sovereign master be made in the new script and/or using the new method of payment. This has the effect of forcing people to adopt the new system, thus validating it. Wide spread use by the general population for all their financial business usually quickly follows. The oldest tricks are still the best tricks from the (global) Ponzi point of view.
This will have a two pronged effect on the system, washing out any chance of laundering larger quantities of our Gold by using it for large purchases and more effectively binding the indentured servant and wage slave to the new currency system. If the slave gets too mouthy and begins to complain, just cause a few problems with his or her electronic payment system and watch them quickly buckle. After all, we all have to eat now don’t we? Never let a crisis go to waste, especially when you are creating it in the first place.
So how will the End Game play out?
The answer is surely in doubt
When all fiat dies
Will sound money rise
Or will all assets suffer a rout?
(The Limerick King)
This is one of the reasons I feel Silver will be more usable as an alternative unit of currency if this global collapse does transpire. Hopefully Silver is incorporated into any new national/global currency as part of its backing, for this will lend tremendous credibility to using Silver in alternative barter/currency systems. Silver throughout the ages has always been used as money and not necessarily as a store of substantial wealth.
This is why you might consider purchasing 1964 and earlier Silver U.S. coins, junk or not. It is important that we incorporate flexibility and diversification into our wealth transfer vehicles as this is the key to successfully crossing over. To assume, hope really, that our one and only method, that of Gold, will be successful is wishful thinking at best and foolhardy at worst. For the masters, Gold is a well known and understood escape mechanism and it will not be allowed to pass totally untouched. We must be different from the masses in order to survive while still being transparent enough that we don’t draw unwanted attention.
And that, in my opinion, is the more realistic path to dry land in this global disaster scenario. The worst thing that you and I can do when preparing for tough times is to develop a severe case of tunnel vision and focus only on our Golden boat as the exit strategy. The bottom line is that we must try to own the same assets that will be owned and transferred by the financial elite and their henchmen and puppets.
While one of those assets will most definitely be Gold, it will not be their only asset or their most valuable. While some of these elite alternative asset classes are out of our reach because of our much smaller stash, and there is little we can do to combat the planned inequalities that will be built into any new system, that doesn’t mean we are helpless or that it is hopeless.
On the contrary, just as the elite see the coming chaos as the perfect time to rape, rob and steal, I see it as ushering in a generational opportunity to build family and community ties like never before. And maybe, just maybe, begin to do some of the hard work we need to do within. Just because we are being buffeted by the fierce rain and wind squalls that precede the hurricane doesn’t mean we can’t use this to our advantage.
However, if we see everything through fearful eyes and with great trepidation we are going to drop the ball and hurt ourselves worse than if we had done nothing. Regardless of what the bad guys did or will do, if we aren’t right within we will wind up harming ourselves much worse than they ever could.
And so this all leads directly to my final thoughts, including one I have shared many times before and which can never be repeated too often. Over the years I have found that regardless of my heartfelt desire for a positive outcome or the gentle and considerate methods used, if my intent and motives are not honest or if I’m not honest with myself or others regarding them, rarely is the outcome to my satisfaction.
Bottom line, this isn’t about the bad guys or their enablers, their greed and lawlessness or even what is right or just. This is about me and my motives and how square I am with myself and others. Just because others lie, cheat and steal doesn’t mean I must follow suit in the name of staying alive or even to justify keeping my head above water. What this isn’t about is sugar plums and fairy tales or holding hands and singing Kumbaya. This is about developing our own Karma and being true to ourselves.
To those who seek power and greed
It will soon be your hour of need
What good is your gold?
When you’re hungry and cold
And the price for some flour is seed
(The Limerick King)
So it is with great concern that I have noticed a disturbing trend among the articles and comments posted of late. I have been a ZH contributor for two years now and I watched the discussions about Gold begin as one of several ways to protect our assets. This conversation began way back when Gold was still largely out of favor even here on Zero Hedge. And I have slowly seen it morph into a widely accepted concept of wealth protection as more and more began to see without a doubt that we are on a collision course with history. There is nothing wrong with this and I have no real problem with it.
But lately sentiment has changed from preserving wealth to growing wealth. And now I am beginning to detect the next stage of the emotional escalation. I am hearing greed and wanton self interest along with the self satisfied chuckle of the prospect of both making a killing and of being proven right when everyone else told us we were wrong. I am hearing the sound of avarice and lust, of rationalization and justification, of outsized egos and very little perspective.
Tunnel vision can take many forms and can strike the best and the worst with the same crushing blow. I have no intention of being self righteous or of calling the kettle black when this pot can be even blacker. That is not the purpose or intent of this essay because there is no denying that I have also felt the seductive tug of jackpot thinking. But when our motive for holding Gold and Silver is distorted and warped by greed and self interest, so is our thinking and perspective.
Which means that if there comes a time when the best move forward is to sell most of the Gold and move on to another asset class, one more likely to survive the transition intact, will we be able to see this as obvious and a no brainer? Or by this time will we so blinded by the Golden glow that we become nothing more than obsessed slaves kneeling in prayer to the almighty God of Gold, seeing nothing but our beloved promised land?
I hope not! From my point of view our most valuable asset is, and will continue to be, an open and flexible mind.
When all markets finally go bust
From our greed induced hubris and lust
To whom do we turn?
What skills should we learn?
It's all just a matter of trust
(The Limerick King)
11-21-2011
Cognitive Dissonance
Special thanks to The Limerick King for his wonderfully apropos limericks. It is an insult to describe the process of condensing complex subjects into 5 lines of prose as ‘writing’. The term ‘stupid good talent’ just begins to scratch the surface of what The Limerick King has to offer. Thank you TLK.
I also wish to thank Dagny Taggart for the ongoing and wonderfully diverse conversation that always leads to further inspiration. Thank you Dagny.
PS: For those who just can’t get enough of The Limerick King, below please find some more of his work that I just couldn’t fit in. Momma always told me never waste a single morsel of The Limerick King.
On the day when the fan meets the shit
And the Kleptos have taken a hit
Will gold save the day?
As all wealth fades away?
I suspect that those bastards won't quit
Do Oligarchs ever retire?
Do they ever just lose their desire?
Does their job ever suck?
Do they ever feel stuck?
Is there ever a Klepto for hire?
I'm glad that I followed my gut
My gold makes me feel like King Tut
But what will I do
Should a riot ensue?
Will a Kilo bar fit up my butt???
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+ 1 Very funny video!
buy land lol
200 million people throwing garbage on the land , no sanitation, water at a premium,
folks going hungry as they try to farm a piece of dirt ,
this is not the kansas of a persons dirt hut era .
still the principle of division of labor will be formost.
a some will farm , some will make the candles , some will make the bread, some will finance the seeds , the manure , the tractors , to think gold will be some incidental nothing is to not have a clue
gold will be a bed rock for new investment , for a degree of safety for capital formation..
the degree of fear mongering and down right stupidity isn\ mindboggling
their will be shops , and industry, towns of safety , electricity , water , sewer
even in the worst of the bagdad war ,, little islands of commerce sprung up.
their were money changer on the streets .. taking real l for fluffs of paper . or in exchange for the real metal for the produce in theri stall,
the undergriound economy will flurish .. exchange , business , yadda
those who believe that real money that has existed for 5000 years is just a hedge arerw whistling dixie with all 5 oz that will soon be in the hands of those who understand economics and sound practices
want a dozen eggs they will be theiir , a few loafs of bread ditto . a warm blanket produced by the labor in excnage for real money
count on it
even now the germanys the russias of the world will spring forth with a barter system alread on the ready
you either have real skills or a a handful of silver to embrace the new .
dumpster here raises a great point that I have talked about at my blog and at pmbug.com. Namely no way that a 55 year old guy like me (nor my wife) is going to scratch a living off the land. Ain't gonna happen...
I do have PMs, but do not have a good skill set. dumpster is right. It would be better to have BOTH.
Mikla, whose opinions I also respect, was leaning towards the States stepping into the void of a monitary break-down. I would guess TPTB would need to consolidate total power before an actual currency brake-down or risk having voids they don't control. Iceland got away from them and I'm still holding out hope that's the direction we end up going in. Plus that gun thing would have to be addressed somewhere along the line before they can truly close the deal.
Thanks so much for being a ZH contributer CD and Merry Christmas to you and your family as well as all ZHers.
I suspect that very few gun owners will actually use their guns again the police/military who are trying to gain entry or otherwide control. A few prime time news stories of "patriots" blown away because they resisted the authorities will convince many others that resistance is futile.
I suspect the idea of gun ownership in America has been used as a thought meme to convince people to be even more passive than they would be if they owned no guns to begin with. Many convince themselves that when the chips are down they will repel those nasty government intruders.............knowing deep down in their heart they will do no such thing.
This is just my two cents worth on the subject. When I was a younger man involved in things that will remain unmentioned I often carried a Buck knife. I always knew that if I carried my Buck I'd better be fully ready to use it and to go all the way. I doubt many gun owners have thought about their firearm ownership along the same lines.
Their thoughts on guns probably reflect their thoughts on gold... a tool to be used most judiciously.
And as a force equalizer.
I think you will find that peaceful people who never thought they'd actually fire a gun, will take up arms when they feel their entire livelihoods and everything they believe in, as well as the future of their children are at stake.
Even those without weapons will still risk a lot to stand up. People have fought peaceful revolutions against all-mighty armies and have won. I have faith (perhaps more than I should) in the human spirit to fight back. I do believe that the possession of the arms makes the peaceful revolution possible. The idea is that the 2nd amendment protects citizens so that they can exercise their rights under the 1st amendment. In theory, their willingness to exercise that right under the 2nd is what makes it likely they will never have to. (like I said, I'm optimistic)
But when the will to actually use that gun is gone, then I suppose all other rights are null and void.
The US government is systematically preparing for unrest associated with economic collapse and lowered standards of living. They are trying to let us all down gently but if there is a crash, they are prepared. Newer laws are in place to give broad un-constitutional powers to the federal government. American citizens can now be legally disappeared, killed and tortured. Local police forces have been militarized by the DHS and the Pentagon. Detainment camps are ready to recieve dissidents.
Those individual citizens who have healthy stashes of automatic weapons, ammo & food seem have to some fantasy wild west scenario about holding off starving minorities who will come streaming out of the cities looking to steal their food. It's not going to be like Mad Max. People, do you really think that the security state will break down just because of a financial crisis? Hell no. What will more likely happen is that anyone who gets too happy trying to be a local warlord or organize resistance etc, will have a predator drone send missiles into their compound in the middle of the night. And it will all be perfectly legal, too. Try fighting that with your shotguns, pistols and automatic rifles -- once you are labelled a threat to national security the gloves are off.
Gold consfiscation? Do people think they are going to waste time trying to figure out the small fry who owns 50 oz of gold? They have 8000 tons of it already (yeah I've heard the tungsten stories), not counting other nations gold is stored in US vaults which could be "borrowed" in an emergency. If it is illegal to trade gold, it will just become even more valuable on the black market.
Actually I do think that the security state could break down because of a financial crisis. Payments stop getting made, Logistics starts to break down, store shelves don't get restocked, most people only have a couple of days of food in the house, and a certain portion of the population decides their hunger is more important than your hunger. Not hard to connect those dots. Police quickly get overwhelmed. Lots of real world case examples - New Orleans after Katrina as a good example. Society can and does break down in a financial crisis. Recommend the book "When Money Dies" about Weimar Germany if you have not read it.
If there is unrest, and a local takes out an out-of-town "starving minority" threatening their family, it will be self-defense and is perfectly legal. The local police force will not be very concerned about it. Maybe the first one or two will cause a concern, but after that a bit of paperwork to fill out at the scene. A lot less hassle if the perp does not survive - one less troublemaker the police, courts, and medical care system have to deal with. And if things get real crazy, the local police will be overwhelmed and there may not be any paperwork.
Most with weapons will do what they have to do to protect their family. And most know that after the first round, the rest are free, so it will be a double-tap or better to be sure the perp stays down. Most people will know that 911 response times are such that they are effectively on their own. The enemy of your enemy is your friend, so the local police will de facto appreciate the assistance of local residents in dealing with non-local troublemakers.
There are some of us who are "Hot" and ready to go from the Holster.
The growing mound of brass testifys silently to the locals about being ready.
I am going with HungrySeagull on this one, CogDis. Once about (50 or so?) Law Enforcers are shot dead, word will get out and *PRESTO!* no more attempts at confiscation.
Would I as a gun owner USE one? Probably not, but in extremis, maybe I would. Hard to say...
HungrySeagull probably is correct here about umpteen millions ARE ready to fire, even if I am not...
---
CogDis, your points above re regulating and taxing gold are duly noted and appreciated.
save in quinoa.
(you can eat it)
save in salba.
(it was used as currency. and you can eat it.)
the true kilos go down and out, not up and in.
Big time gold bull Bearing offers some observations:
1) Very good and thought provoking articles CogDis!
2) As you say, there is a spectrum of BAD outcomes that could happen, who knows which will happen?
3) I have preached holding other PMs as well (silver and platinum). Diversification...
4) I do NOT want a TEOTWAWKI! Count me off the list re "burn it down", I have read too much history...
5) Confiscation by .gov might be very hard. Who knows? Not me...
6) I had not considered a global approach by all the OTHER .govs...
7) I need to reach out and find my local black markets (w/out getting killed or arrested).
Hi DoChen-
Just a note on your point #7. You are not looking for any black markets, and I would suggest you keep it that way. While it may be a mainly semantic issue, what you want are "gray markets." The distingushing point is that a black market is primarily associated with stolen or illegal goods, while a gray market, while technically illegal in some respects, generally does not include stolen or illegal goods. These tend to be situations like swap meets and gun shows- while you're tending to pay cash, often without sales tax in transactions that are off any official set of books, you are not doing anything actually but sidestepping the system.
In most cases, gun shows or swap meets, as mentioned above, are your best entry point into these structures- the people that sell in these systems tend to form networks over time, and the best move is to simply show up with some regularity, and talk to people. Honesty is really the best policy- most of those folks got into what they are doing for the same reasons that are prompting you to seek them out. Be sure to mention what your priorities are, as there is often someone who knows someone who has what you're looking for, whether that's shotgun shells or farm-fresh eggs, and if they trust you, they'll let you know who to call. It can take a while, so don't expect a warm reception right off the bat.
I know you hold silver as well, so keep in mind that the legality of "purchases" changes when it becomes barter. Using paper cash is an implied promise to pay tax, whereas exchanging silver coin for goods can easily be described as a "like-kind" trade that is not necessarily subject to taxation of any kind, and is definitely exempt from capital gains taxes. Our system has invested a lot in making Au and Ag into commodities, and that is a genuinely useful situation- at least in theory, you can trade them for any other commodity tax-free. The gotcha here is that you have better make sure that you trade in terms of ounces, and not in terms of dollars- it would not take a very sharp DA to assert that because an exchanged item was valued in dollars at the point of sale, a de facto conversion from commodity to cash and back to commodity occured via the reference to the price in dollars. Getting the issue straight in your own mind may one day be the difference between a costly legal battle and simply walking away from the scene unmolested- if there's one thing I've learned in my own life, it's that having a smooth line of plausible patter, even if the legality is questionable, will keep you out of most trouble. Again, I'll note the importance of honesty- people can smell a liar, and no amount of lipstick will get that kind of pig out of corner. The key is remaining morally upright, while disagreeing with the letter of the law.
But that is a side issue- the important thing to keep in mind is that you are not looking for black market goods (at least, from what I've seen of your posts and general outlook here.) It's a safe bet that stolen TVs, insurance fraud goods, drugs and warlord-class weaponry are not on your shopping list. You're just looking for like-minded indiduals who aren't interested in participating in the larger system right now- if you say black market, you may as well consider yourself automatically shut out.
One final note- I thought you were a follower of Another, FOA and FOFOA. If that's still the case, I would suggest you re-read their documents in light of your sixth point.
@ Prometheus418
GREAT point re gray markets! I am not interested in stolen goods, illegal stuff, slaves, warlord-class weapons (well maybe!), etc. (black market), thanks for showing me the distinction. GRAY market about covers what I would want.
YES, FOFOA is my Trail Guide. I think he is probably right, no confiscation. I refer mostly to CogDis's point that our AND other .govs might do the irrational and try to confiscate even though gold held by us shrimps WOULD be the source of capital to rebuild our system. Hey, I am not God, even FOFOA is not! He could be wrong, although I think he is right.
Thanks for helping me think more clearly!
Good stuff. Merging with existing networks is good advice. One will be rewarded with information on who the best and most honest traders are. One caveat: The Chinese are creating some very solid counterfeit coinage now. Some have nearly fooled the coin grading services. They are also creating encapsulated (slabbed) coins in familiar NGC and PCGS holders! You'll find lots of this at swap meets, non-sanctioned gun shows, and other such venues. One HAS to be able to tell the difference between faked and real silver coins when trading. Get some and handle them! That's the best way. Don't obtain a coin that you are not familiar with from someone you don't know.
It is your local "black market" buddy who will likely make the .gov confiscation a lot easier.
Block monitors and the salem witch trial effect will take over and your friendly neighbor will be the one to turn you in.
On a more positive note: If .gov cannot keep heroine out of high-security prisons, they will have a hard time keeping gold out of the hands of the populace. Since when have the government bureacracies been good at running ANY kind of "War on [fill-in-the-blank]"? War on drugs/poverty/terrorism....war on gold-hoarders will likely not be any better-executed.
Block monitors ahh, sounds like a dangerous job. By the way I think .gov has failed with keeping heroines out with conjugal visits and all but in fairness have done well with batman, superman etc..
Government doesn't even need to physically confiscate as long as they can dictate an artificially low price. BINGO, the majority of the value of your PMs has just been taken from you.
When a financial crisis goes global, even the worst of enemies will see the logic in working together to regain stability. Then the bloodshed can resume.
That is in play now, CD. The value is being manipulated now, as we all know. The future is here.
There are a few whiners right here at ZH who I'd not want as neighbors. They'd turn me in for a bag of rice.
CYA, bitchez!
Well done, CD.
As Taleb points out, none of us is very good at predicting the future, and we are least able to predict the most important things.
The more 'invested' we are in one particular outcome, the less likely we are to clearly see and properly value alternative outcomes. Our most valuable asset is an open and flexible mind.
Fewer than 1 in 500 Americans own even a single ounce of physical gold bullion. Barely 1% hold paper forms of gold. Americans in general own less than 8% of the world's gold supply, with the very vast majority (8,133 tons) being in the hands of the US government.
With so little physical gold in the hands of Americans I just do not believe it will be an issue. This is vastly different than what Americans faced in 1933. I realize that ZH readers tend to have a large portion of their wealth in gold and focus on it relentlessly, but the rest of the US does not.
When the new or old US fiat must be protected at all costs they will go after the mostly widely used inlfation hedges. Gold is simply not it. I realize that those who hold physical gold will come out better than most, but so will people holding a wide range of other assets. The focus of government wealth confiscation has always been on the most widely used assets for storing wealth.
Who will face problems? Landlords for one. They are already a prime target. Being a landlord has gotten harder and harder. They've been turned into the enemy. And history shows that all over the world they are the first to take it up the ass in an economic crisis. It's been happening since the Roman Empire when farmers had their land confiscated. We've been taught for 40 yeras to buy rental property as a place to build and store wealth. And people do. In a BIG, BIG way. It absolutely drawfs the wealth we in the US store in gold.
So I would not recommend farmland, which is all the rage right now. Gold is laughed at. And there is FAR less privately held value in US gold than in US farmland.
Silver might even be better. No one gives a shirt about silver. So I own a bunch of it.
One last point: Store your PMs on your own land in several places in the US. It's tough but you can do it cheaply. There are many places where a small one acre lot can be had for a few thousand dollars.
Your scenario is well thought out but you forget nor critical issue. A nation cannot trade with another nation with its farmlands.
Landlords? Can't say I have a lot of sympathy for rent seekers of any stripe.
Farmers? Small/medium, those guys rock. Big corporate "farmers" aren't farmers IMO.
Farmland IMO will be hard to seize if the community rallies around them.
The community will not rally around owners of farmland. An extremely small percentage of the population owns any. A special tax on farmland isn't likely to be fought too hard.
What is your beef with landlords? My parents have worked their whole life cleaning, rennovating, renting, dealing with deadbeats, fixing their messes, landscaping, etc. They have provided people with a nice place to live who otherwise are incapable of taking care of a house. Without landlords there would be a lot of people living in cardboard boxes.
No, they are not rich. They work and get dirty. The only difference is they do it all hours of the day and night and for very little gratitude from people like yourself.
Spoken like someone who lives in a city.
AFA your parents are concerned, small landlords I have no problem with. It's the inherited money douches that cut deals with government to get sweet deals for 1000's of units.
You make the assumption that there is little gratitude ever being shown, as well as there being many competent landlords such as your parents. Dealing with good landlords (at least in Australia) is a rare occurrence, in my experience. Generally they aren't even in the same country, and as such, don't really care about the property, just so long as they get money.
Which makes me wonder - if SHTF, what will become of all those investment properties owned by overseas interests? I can't imagine they'd fly over and kick you out, nor can I imagine real estate agents coming to their aid if the money isn't flowing to them.
Precisely. People are going to get a real wake-up call about property rights.
If the community doesn't back you, you won't own land in it.
I think many landlords have sacrificed spending on anything for years in order to save up to purchase property. Lots of labor-hours went into making that investment. Many of them purchase those properties on very low incomes, and barely make it for decades until the property is fully paid off. Selling an apartment to rent is not so much different from owning and selling anything else.
If the idiot wants to work hard and buy a house and rent it out, nobody is stopping him. But he'd rather play his "victim" game and whine about being exploited.
But what do you expect, dude's got a hole in his head.
I defy anyone to show me someone who "saved up for years" to afford a 400 unit highrise.
a narrative based on whole cloth .. in my opinion
just make things up.. give it a fear based model .
China is encouraging gold buyers . india ditto , the bankers are buying gold hand over fist
if the usa declairs gold iverbouten ,, gold will scream for a higher price world wide leaving the usa exposed to no trade world wide
coin dealers will be any person with a oz of sense . and an oz or two gold . in 1/10 oz sizes .. silver dimes , yadda
in my opinion those who scream the loudest about the gold confiscation issue are some of the crowd who have so little gold that they use this point to cower in fear . and a boo is enough to send them inot some sort of an epilectic tizzy
who are these they's that will be checking , a handful of government folks who can be bought off with a handful of dust .... The military that will come out in force to defend the constitution.
the business person who will want value for his product .
a nation crawling on its belly will be glad to find a gram of gold for survival ..
sells copy but mostly fear for the masses and trolls with an agenda .
give them another boot to spit in .
Just in from GoldenJackass: (http://news.goldseek.com/GoldenJackass/1324501200.php)
So a huge huge huge buyer of gold is busy, and a multi-$billion order is working through. The buyer demands a $1600 price, while on the other side of the table Agent2000 has a sale lined up for the same metal at a $1900 price on physical. The trade will take gold bullion from the Bad Boyz hands and put it into the Good Guyz hands. In the process, the COMEX supply lines will be drained more. This is consistent with mining firms removing supply lines to the COMEX. The Agent2000 buyer is pushing price down, squeezing some evil parties hard, crushing testicalia along the way. He (they) describe to the distressed seller at $1600 that pressures will continue until the deal is closed. The seller is in tremendous pain with open distress showing. So many assume the Bad Powerz are pushing down the Gold price. Not so!! This event and transaction displays how some pain comes in many isolated cases of Good Guyz pushing the Gold price down to empty the Bad Powerz vaults.
I wonder how many of our rich Senators/Congressmen have stashed their ill begotten money in gold or gold related products? Probably a lot higher percentage of ownership than the general population. Maybe that will offer some insulation against a grab. Of course they will all know about it in advance of the rest of us and trans fer into some other hard asset before the ax falls on the rest of us.
Any guesses on what country wil first be forced to sell their gold , if it can be found, to deal with their debt problems? Chavez isnt so dumb IMV
if the sale of gun safes and money vaults to Senators/ Congressmen and former Presidents were subject to freedom of information requests, you might have a good idea. Until then, you'll have to ask the local dealers in safes and guns.
Public servants should forfeit their right to privacy.
Bank accounts, phone records, purchases, holdings, tax returns, etc.
Same goes for any goobermint employee. Everything out on the table motherfuckers. After all, they are PUBLIC SERVANTS.
Let's make 'em get public, and force them to actually serve US for awhile.
Federal employees who hold positions affecting government spending typically have to file formal disclosures of their investments/holdings. Everything else having to do with their jobs - phone records, emails, yada, is just a click away. If it's held in a system of records it is public information. You guys "own" it all already.
As for the private behavior of public servants, they're citizens, regular folks, paying bills and trying to hedge themselves for the collapse just like everyone else: Dry beans, rice, camping gear, sometimes bullets . . . After all, who would sooner see "the light of an approaching economic trainwreck" than a public servant? Maybe folks working in the econ/financial biz, but government employees have got to come in a close second.
Oh, those same public employees who trade on insider information?! Give me a fucking break. FULL DISCLOSURE. IF YOU HOLD A FEDERAL OFFICE YOU ARE NO LONGER A PRIVATE CITIZEN. TOUGH SHIT.
Sorry. I no longer trust them. They can thank those fucks at the SEC.
It's our fucking governement, and we can order our elected fucking officials to make all goobermint fucking employees comply with the new fucking rules if they want their cushy fucking goobermint job.
Otherwise, go scrabble to provide a good or service with the rest of us.
Well, I gave you MY part I but I won't have part II before a month of sundays!
I'm lost in transposition somewhere between Kashgar and Acre, counting the heavenly shooting stars, like ephemeral sparkling imagery of a King Solomon's mines; buried golden bars in Motezuman halls of latter day conquistadors.
I wonder how many of our rich Senators/Congressmen have stashed their ill begotten money in gold or gold related products? Probably a lot higher percentage of ownership than the general population. Maybe that will offer some insulation against a grab. Of course they will all know about it in advance of the rest of us and trans fer into some other hard asset before the ax falls on the rest of us.
Any guesses on what country wil first be forced to sell their gold , if it can be found, to deal with their debt problems? Chavez isnt so dumb IMV
As I mentioned in the piece, I expect the details will all be worked out in advance. Multi-tiered conversion rates for your old slave script (the poor will get the worst screwing......of course) as well as fixed artificially low prices for your Gold as long as you are a useless eater like the rest of us. Our ruling class will of course get the preferred rates.
I hold no illusions on this point.
(the poor will get the worst screwing.....
It would seem Obama's plan is for all of us to be poor, except for faithful friends, contributors and elite intellectuals of the proper frame of mind. I can't imagine going through all this work without being able to command over 300 million souls as if they were so many Dickensian orphans.
Goddamnit.
Gene Parmesan
Yuppers, and also do not forget your Septic Tanks(yes they do dive in shitter tanks), and ponds,compost piles, and lives stock stalls (pig / Hog pens), they know just about every hide out their is,thanks to the Nazi's in WWII,and the War On Drugs.
Thank god for the great outdoors and shovels.
hello gene. ...or sould i say "onyong"
i didn't recognize you.
have you seen my lawyer Bob Loblaw?
gotta go, Tobius F - regestered analyst/therapiat, aka - Analrapist
I suspect hundreds of ZHer's are frantically looking for a new PM hiding place tonight. I found a new hiding place for my stash shortly before I posted. :>)
Forget your stupid hiding places. My stash is in the closet, where I can gloat over it. I love the sound of silver in the morning. The regime and its agents will cease confiscating only when enough of them get killed off. Don't hide your guns, PMs, whatever else you value. Get ready to defend these values with the ultimate value, your life.
Molan Labe.
damn it, I'll need to move mine too now.