Posted Oct 23, 2013 by Martin Armstrong
QUESTION: “If the new reserve currency that will emerge will be electronic, and no gold standard is possible, why will governments confiscate gold?
If the great deflation strikes after 2015.75 all assets can go down a lot in value, so is not good to hoard cash, common u$s bills at your home, or will cash value less tan other assets?”
ANSWER: We are in an asset confiscation mode right now where they see all wealth as really theirs. They seem to be after gold not to confiscate it for a return to a gold standard, but as an escape from taxation. There is a rise in barter taking place and even rare ancient coins dealers are complaining that nobody wants to sell. This is part of the hoarding where people will hoard different things but the end game is the same. Keeping “cash” handy yes. Keep in mind that is necessary because of capital controls as we saw in Cyprus. In December last year, I could withdraw 1,000SF at an ATM. Now, the maximum is 500SF and in Italy it was €150 down from €200 last year. The various governments are trying to eliminate cash for they see that as an escape valve.
The Fed has been telling banks to re-calibrate their models for there may not be the flight to quality this time during any decline. Property values in London have jumped 10% on average as politicians are trying the same policy that led to the 2007 crisis – over-leveraging property. Thailand is looking at introducing a property tax. Everything is very much in the air.
We will still see gold rise. However, it is being driven deeper into the underground economy simply because these people need money desperately. This is the crisis. It is the hunt for whatever is not nailed down. They cannot see what they are doing to the global economy.
We are going to have to start coming together to make our voice heard on a global scale.