Yearly Archives: 2013

With Gold, Don’t Miss the Top

"Zero Hour is the moment the price of physical gold starts to run away from the ‘paper price’ you see on CNBC’s ticker. The most likely catalyst is a chain of events that goes like this: Western central banks have leased their gold to commercial banks like JPMorgan Chase at an interest rate of less than 1%. The commercial banks have sold that metal and ploughed the proceeds into assets that earn more than 1%. The chain of custody on gold bars has become so cloudy that a major exchange like the Comex in New York is liable to ‘default’ on a gold contract – settling in cash, instead of metal. A rush for real metal would then be underway." Continue reading →

Continue ReadingWith Gold, Don’t Miss the Top

The Bull Within the Bear

"The reason it's important to look at the entire picture of investment demand is because an investor might draw an erroneous conclusion if they read just the headlines. For example, China and other Asian nations represent well over half of all global investment demand, while North America is just 9%. Is this bigger source of demand experiencing a lot of selling, too? Let's look at the bigger picture of investment demand for gold this year. In the following chart, we compare GLD outflows to Chinese imports through Hong Kong, as well as other sources of demand for physical metal. Here are the data through last month." Continue reading →

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A Dozen Things I’ve Learned From Michael Mauboussin About Investing

"1. 'The only certainty is that there is no certainty… With uncertainty, the underlying distribution of outcomes is undefined, while with risk we know what that distribution looks like. Corporate undulation is uncertain; roulette is risky…' There is no single number which can be used to predict the future price of an investment because the future is not only risky (like roulette) but uncertain (unknown unknowns). There are known future states for which probability is unknown and future states that are unknown for which probability is not computable." Continue reading →

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It’s a Sound-Money Alternative to the Dollar

"It should be no surprise to any student of economics that when government has a monopoly on money, it will be mismanaged. A better approach would be a free market in money: currency competition among entrepreneurs. Bitcoin is one of the opening salvos in this battle. In some respects it is very promising as an alternative currency and as a possible wholesale replacement for a national currency. In other respects it falls short. Bitcoin is a fiat currency that has achieved popularity and value without the mandate of a government legal tender law. On the contrary, the government strongly discourages bitcoin use and has used regulations to frustrate its adoption." Continue reading →

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The Mind-Boggling Implications of a Bitcoin Economy

"While much has been said and written about the nascent crypto-currency's underlying technology and recent volatility, one nagging question remains: what if Bitcoin emerges as a viable and sound currency, just as the world's central banks reduce their notes to confetti? If this simple question doesn't inspire chills, perhaps it should, given Bitcoin's potential to overwrite the matrix of the world's ailing currency system even faster than the internet went mainstream. This will be among the topics of discussion this October at an unusual gathering of libertarians, economists, and computer scientists in Atlanta for the first ever Crypto-Currency Conference." Continue reading →

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Barclays account shutdown raises Somali fears

"Barclays bank is closing about 100 UK accounts held by cash transfer businesses, over fears they are being used for money laundering. The businesses are vital for Somali expatriates sending remittances back home, where banking facilities have collapsed. Aid workers say the service is a 'lifeline' for 40% of the Somali population, who rely on the transfers. It is feared that the cash transfer business could now go underground. Barclays is the last major UK bank that still provides such money transfer services to Somalia, which has an estimated 1.5 million of its nationals living overseas." Continue reading →

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Taxpatriate? Tax dodgers welcome to leave, not welcome to return

"An amendment to the Homeland Security Bill has been proposed banning US expatriates who have renounced their US citizenship or long-term residence in order to escape US tax obligations from entering the country. The amendment would mean that former citizens of the United States who officially renounced United States citizenship and who have been determined by Homeland Security to have done this for the purpose of avoiding US tax obligations are inadmissible. Furthermore, covered expatriates unable to present evidence that they renounced US citizenship with the purpose of avoiding US tax obligations would also become inadmissible." Continue reading →

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When Are Tax Penalties Excessive?

"In a civil lawsuit that has attracted notice among tax experts, the government wants to collect nearly $3.5 million in penalties from a taxpayer who had a secret Swiss account, although the account balance was never higher than $1.7 million. The lawsuit, U.S. v. Carl R. Zwerner , was filed in federal court in Miami last month. Spokesmen for the Justice Department and Internal Revenue Service declined to comment on the case. Mr. Zwerner, 86 years old, is a retired specialty-glass importer living in Coral Gables, Fla. The U.S. government alleges he had an undeclared account at an ABN Amro bank in Switzerland from 2004 through 2007." Continue reading →

Continue ReadingWhen Are Tax Penalties Excessive?

US Is World’s Largest Tax Haven

"What is the world's largest tax haven? If you guessed any country in the Caribbean, South Pacific, Asia, the Middle East, Africa, Central or South America or Europe, then you would be wrong. Only the United States can lay claim to that title. Ever since the French loaned money to the struggling revolutionaries who defeated the British to create the United States, to today where the Chinese are buying U.S. Treasury debt, the United States would not be able to maintain its economy without large inflows of foreign capital. Foreign investors can invest in the United States virtually tax free — in structures that are legally protected from risks and, currently, with secrecy." Continue reading →

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Gov’t Bureau ‘Creating a Google Earth on Every Financial Transaction,’ Senator Warns

"'This bill (creating the CFPB) was supposed to be about regulating Wall Street. Instead, it's creating a Google Earth on every financial transaction. That's right: the government will be able to see every detail of your finances. Your permission - not needed,' Sen. Enzi said. 'They can look right down to the tiny details of the time and place where you pulled cash out of an ATM,' Enzi warned. And, there's nothing you can do about, since Americans don't have the ability to 'opt out' or prohibit the government from collecting their personal financial data, Enzi said." Continue reading →

Continue ReadingGov’t Bureau ‘Creating a Google Earth on Every Financial Transaction,’ Senator Warns