By MoneyMorning.com.au
‘When at the summit of his power, he [King Canute] ordered a seat to be placed for him on the sea-shore when the tide was coming in; thus seated, he shouted to the flowing sea, “Thou, too, art subject to my command, as the Iwid on which I am seated is mine; and no one has ever resisted my commands with impunity. I command you, then, not to flow over my land, nor presume to wet the feet and the robe of your lord.” The tide, however, continuing to rise as usual, dashed over his feet and legs without respect to his royal person. Then the king leaped backwards, saying: “Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth, and the sea obey by eternal laws.”‘ – The Chronicle, Henry of Huntingdon, 13th century
The acts of central bank interest rate manipulation and government central planning are like King Canute trying to hold back the tide.
The difference is that Canute knew it was impossible for one man — however powerful — to influence the tide. So he showed his toadying bureaucrats that he was only human and not a God.
The central bankers and politicians wouldn’t dare do the same. For a start, they aren’t as humble. They believe they can turn back the tide. That all they have to do is change the interest rate, raise a tax and subsidise an industry…and hey presto! The economy booms.
Only it doesn’t, because there’s no turning back the natural law of the free market. The free market goes where the components of the market (individuals) want it to go…and that’s in millions of different directions…
That’s what the bureaucrats and central planners can’t handle. When you’ve got millions of people making decisions in their own lives, it makes it hard for the central planner to gain power and grant favours to their buddies.
The only way they can resolve this is to pass laws that force individuals to act in a certain way…and use the threat of violence to ensure individuals comply.
Unfortunately, there seems to be no limit to what the politicians will do to hang on to power and spend your money. Overnight, the European Central Bank (ECB) president, Mario Draghi said:
‘Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.’
In other words, the ECB will turn back the tide. We’ll watch how that works out with interest.
Protect Your Savings Now
But it’s not just overseas where politicians and bureaucrats are harming and taking personal wealth. This week we received the following email from the Australian Treasury:
‘The exposure draft for the transfer of State and Territory unclaimed superannuation to the Commonwealth regulations and the accompanying explanatory materials has been released for public consultation…[This] will allow prescribed public sector superannuation schemes to pay unclaimed superannuation money to the Australian Taxation Office (ATO).’
We first warned you over three years ago about the threat the government posed to your retirement savings.
We told you the expropriation of retirement savings would happen in stages. Of course, as with our call warning of a housing crash and the fragility of the world economy, our critics ridiculed us.
But slowly, as time passes, once again we’re being proven right. This time the government is even taking money from its ‘own people’ – public sector workers.
Of course, we’ve less sympathy for public sector employees than private sector employees. But what concerns us more is that this is simply the next step on the government’s path to take all private wealth.
Not that the government sees this as theft. Naturally, when the government does anything, it’s always spun as a benefit to the people. In this case, the government authorising the tax office to take personal savings will…
‘…improve the administration of superannuation by facilitating the transfer of various unclaimed monies to the ATO.’
[Clap, clap, clap…]
Very clever.
But as we say, this is only the beginning.
It’s set to get worse.
The ultimate government aim is to take all private wealth, whether directly (taxes) or indirectly (inflation), and then fob the rightful owners off with a piddly little government pension.
As much as we’re not fans of the big banks and their investment performance, we know for sure private investments are a far better bet than anything the government will give you.
That’s why it’s important you take steps to plan for your retirement now…and preserve your wealth outside the financial system…
Gold and Silver:
The Assets The Government Can’t Delete
The best way to do that is with gold and silver.
The fact is gold remains the best way to protect your wealth against government tyranny.
Bank savings, shares and other securities, are all electronically traded. The government can freeze these assets at the flick of a switch. And if it wants to, delete and expropriate them.
The government can close the banks and shut down the stock exchange.
But gold and silver are physical and tangible assets.
It’s not easy for the government to close down the gold and silver markets, because anyone with any sense will hold physical gold and silver. The government can’t delete your gold.
Of course, cash in your hand (or under the mattress) is a physical asset too. But unlike gold, cash only has a value as long as the government allows it to have value.
You can hoard as much cash as you like, but if the government decides to withdraw or cancel the currency from circulation, your hoarded paper dollars will be worth no more than any other piece of paper.
So holding physical assets like gold and silver is important for anyone who’s serious about protecting their wealth from government meddling.
How much you own is up to you. We’ve heard of some people who have more than 90% of their wealth in gold and silver.
But we’d suggest at least 5-10% of your wealth in gold and silver…more if you’re really serious, and worried about the threat of government meddling with your wealth.
It’s important to hold a portion of your wealth outside the financial system. Banks worldwide are under immense financial pressure due to the fragility of the banking system (Australian banks included).
And governments are struggling to pay for the Welfare State benefits they’ve promised to generations of people. As governments don’t generate their own revenues and profits, their only funding sources are debt and taxes.
Both are close to reaching saturation point. The market can’t handle much more debt and taxes are already oppressively high. That’s why governments are looking towards a third source — expropriation of private wealth.
Gold and Silver Will Prevail
Where Paper Money Will Fail
That’s why it’s important to act now and seek out ways to protect your wealth. But where do you start?
Our advice is to start with Dr. Alex Cowie’s May 2011 issue of Diggers & Drillers. In that issue he set out in detail how to buy gold and silver, and how to store it safely.
It’s a must read if you’re serious about protecting your wealth. In fact, that one issue alone is worth the subscription fee.
When the ECB president admits he’ll do everything it takes to protect the institution of paper currencies, it tells you the destruction of the euro (and eventually paper currencies) is certain.
When that happens, there will only be two ways to protect your wealth, and they are gold and silver.
Cheers,
Kris
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