Blog/The Hunt for Taxes
Posted Jul 24, 2015 by Martin Armstrong
Well if you ever needed PROOF that gold is not money, but rather simply an asset class, all you need to do is look at what governments are doing. They are hunting for anything of value. We are likely going to see a migration of assets from Europe to the USA, as took place prior and during World War I and World War II. Even Germany is now altering laws under the pretense that they are suddenly concerned about protecting cultural heritage. Under the pretense of updating legislation on the Protection of Cultural Heritage (Cultural Property Protection Act), they are targeting collectors RETROACTIVELY.
Germany’s new proposed legislation is radical and highly destructive. It is going much further than FDR’s confiscation of gold. A new bill states: “This amendment not only aims at combating illicit traffic in cultural objects in Germany, but at limiting ways of funding of terror organizations that are more and more financed by illegal excavations at archaeological sites as well as by the illicit trade in that cultural material.”
This of course is an unproven theory without a single transaction ever taking place. Obviously, there will be some registration fees as well. The citizen must provide photographs of every item at their own expense and they must describe where they hold the object. They must immediately report the movement of any such object; any sale must be reported for how much and to whom. It is a great smoke screen for shutting down the ability of collectors to move. All collectors in Germany must now report whatever they have to the government.
The law is applied retroactively. In section 32.3, it reverses the burden of proof and it will assume the item is illegal “if the date of exportation cannot be furnished or ascertained.” That means anything in collections for hundreds of years can be confiscated without proof of when it was exported historically. Then the state confiscates any property that cannot be proven under the assumption of guilt and then section 39 stipulates “the person that has been divested of the safekeeping” must pay for the entire cost of the government confiscating your assets. Dealers have the burden of checking all items for its “cultural value” in excess of €2500 and for its archaeological heritage value if greater than €100. The dealer must photograph every item and report the seller and buyer. Then section 46 requires dealers to retain records for 30 years.
There is not a single instance of any terrorist selling anything in the collector’s market. We should expect an exit of collections from Europe to America. They are systemically destroying the world economy and there is not much we can do about it. Dealers are circulating petitions to ask people to stand up for their rights or the entire trade may be out of business in Europe. (See Gorny & Mosch)
Ironically, all the European rarities migrated to the USA for World War I and II. They moved back as Europeans became buyers post-WWII. It looks like the cycle is reversing once again. Europeans can open bank accounts in the USA as FATCA does not prevent them from having accounts in the USA whereas Americans cannot have accounts in Europe. The capital flows measured even in tangible asset classes is only pointing into the USA on so many levels.
From every which angle, the dollar is simply pointing higher. This is what we need to create the deflationary recession in the USA. Like the decline between 1981-1985 that was followed by the birth of the G5 at the Plaza Accord in New York September 1985 to manipulate the dollar lower for trade, this time the STRONG dollar will lead to the adoption of a new reserve currency. The IMF is positioning itself starting at the turn of the ECM in September 30/October 1st to pitch the SDR as the new reserve currency. None of this will really matter for the central reason why the dollar is the reserve currency is not some decree, it is the fact that the US bond market was the deepest and that enabled a place to park money.
The IMF cannot step in and replace the dollar. We need our Solution in order to replace the dollar as the reserve currency. Until we take each step as outlined at that conference, then the dollar will remain as the king of the road for capital until this cycle is complete.