Thursday, December 22, 2016

Gold is Now Effectively Illegal in India

In the last 8 years I bet that many of you have heard people say, "Only gold is real money....everything else is just paper."

It's true that the $20 bill in your wallet is only paper.  There is NOTHING backing it up except the confidence you have that someone will take it from you tomorrow in exchange for eggs and milk.

Gold has been money for thousands of years whereas paper money comes and goes.  Look at Venezuela.  They are now burning their money for fuel because it is worthless.

But what happens if the government that prints your paper makes gold illegal?

"Dennis, that could never happen!"

Jayant Bhandari warns "there are clear signs that in a very convoluted way, possession of gold for investment purposes will be made illegal" as he discusses India's attempts to create a cashless society (and consequences of it) and why precious metals and geographical diversification are the most viable options investors around the world, not just India, should be taking.
"The situation is getting worse by the day... people are desperate"
Assaults on people’s private property and the integrity of their homes through tax-raids continue.  In a recent notification, government has made it clear that any ownership of jewelry above 500 grams of gold per married woman will be put under the microscopic scrutiny of tax authorities.
Steep taxes and penalties will be imposed on those who cannot prove the source of their gold. In India’s Orwellian new-speak this means that because bullion has not been explicitly mentioned, its ownership will be deemed to be illegal. Courts will do what Modi wants. Huge bribes will have to be paid.
Sane people are of course cleaning up their bank lockers. The secondary consequence of this will be a steep increase in unreported crimes, for people will be afraid of going to the police after a theft, fearing that the tax authorities will then ask questions. At the same time, the gold market has mostly gone underground, and apparently the volume of gold buying has gone up.
The salaried middle class is the consumption class, often heavily indebted. Poor people have limited amounts of gold. The government is merely doing what pleases the majority and their sense of envy, to the detriment of small businesses and savers. Now, the middle class is starting to face problems as well. This will worsen once the the impact of the destruction of small businesses becomes obvious.
India has always had a negative-yielding economy. It has suddenly become even more negative-yielding. Business risk has gone through the roof. Savers will be victimized. It is because of negative yields that Indian savers buy gold. They will buy more going forward.
Sane Indians should stay a step ahead of their rapacious government and the evolving totalitarian society, which are less and less inhibited by any institutions or values in support of liberty.

"OK Dennis, maybe that could happen in India, but it could NEVER happen in America!  This is America!!"

Ummm.....better think again.  Gold was illegal to own in USA until law was lifted in 1974

FDR Outlaws Gold
One of FDR’s first acts as president, therefore, was to declare the fact that Americans were withdrawing their gold and currency from the beleaguered banking system “a national emergency.” He ordered all banks to close from March 6-9 “in order to prevent the export, hoarding, or earmarking of gold or silver coin or bullion or currency.”
Because he believed this action was not sufficient to prevent runs on banks and the resulting drain of gold from the system, on April 5, 1933, one month after taking office, Roosevelt used the powers granted to the president by the Trading with the Enemy Act of 1917 to make gold ownership illegal. He issued Executive Order 6102, which made gold ownership—both in coins and in bars—illegal for all Americans and punishable by up to ten years in prison. Anyone caught with gold would also have to pay a fine of twice the amount of gold that was not turned over to the Federal Reserve in exchange for paper money.
Yes!  "Please bring all your gold and valuables to your local bank and exchange them immediately for PAPER MONEY!  Anyone caught not doing this will be subject to 10 years in jail and $100,000 fine."


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