Monday, February 13, 2012

The End Game Is Near?

The last days of Rome saw the then regime begin to increasingly use oppressive policies of greater taxation and greater control over it's citizens finances. In the death spiral of an empire, when a government cannot pay it's bills, it seeks to suck the financial life-blood about of its own people.

They get desperate to hold onto power. And it isn't a pretty sight to behold.

Long years of war (sounding familiar) for Rome drained it's wealth. After the prosperous years of being generous with social programs, like allowing grain subsidies to it's citizens, Rome began to "run out of other people's money". They first began to 'clip' their silver and gold coins and eventually reduced the gold and silver content. The ancient definition of 'quantitative easing'. Inflation ensued. When this was failing, the government had to do something, so it went after the wealth of it's citizens.

So forward to today. The US has announced a number of policy changes to go after wealth globally. Even our little kiwisaver schemes, when invested in US mutal funds, may be about to be hit with taxes payable in the US. Another blow for the ailing kiwisaver scheme. And don't forget the US regulations surrounding the money deposited in Swiss bank acounts by US citizens. There is no hiding anywhere and no safe harbour for wealth.

Futhermore, the FBI have recently put out a statement referring to people who believe in a gold standard (incidentally, I haven't a firm view on this) as extremists and their activities need to be watched. The reason? A gold standard would destroy the US dollar and hence financial system.

But let us not mention, not even a whisper, that since the Federal Reserve was created in 1913, the US dollar is now worth...wait for it... just 4c.

Will the Federal Reserve Bank be on the 'extremist' watch-list  for destroying the US dollar? Hmm.

New Zealand is not immune to similar draconian measures. The IRD here has spent zillions on upgrading their computer systems to better report people's income and hence tax dues. Maybe expect the heavy hand of the IRD to once again rise to strike?

Politicians and their backers like power. They make the same mistakes throughout history in order to maintain that power. As mentioned last week, the Federal Reserve is trying to devalue the US dollar via stealth using a process called 'financial repression'. Now watch the rhetoric around those who are being prudent with their savings ramp up. Especially negative propaganda surrounding those who own precious metals?

The end game is near?

Gold in New Zealand dollars: $2084.11 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.65 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)

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