An Unexpected Bonus

To be a sovereign these days is very rare, so few know what to expect when steps are taken in that direction. I knew that my decision to stop obeying the taxman came with risk. I knew that he might decide to toss me in jail. He might even torture me, like he did with Odd Nerdrum. However, five years as a slave was just too much of a price to stomach. I would rather go to jail than spend that much of my life paying tribute to that most despicable of beings.

I pulled my savings out of Norway, I bought gold, and I bestowed my children with an early inheritance. I put myself between them and the taxman. Rather me in jail, than any of us having to slave for him more than absolutely necessary.

When my wife first heard of my decision, she disapproved. Like most people, she saw my action as criminal. By not paying my taxes, I was stealing from society. This is such a common error of thinking that I did not even bother to correct her. However, I pointed out that I was not stealing from the Portuguese state. I was stealing from Norway, a place I left ten years ago. I also pointed out that I was doing this just as much for the children as for myself.

She was not entirely convinced by this, but the idea must have grown on her, because she has become more affectionate. I have also become more affectionate towards her. The full consequence of sovereignty is dawning on us both. We no longer have a fatherly state watching over us. We are no longer children of the taxman and his ilk. We take care of ourselves. We do as we please. The effect of this is that we feel more alive than ever. We also feel the full weight of responsibility towards ourselves and our family. We own our destiny. That explains the affection. It explains why we feel so alive. I had not expected this to happen, but now that I think about it, it makes perfect sense.

Sovereign

By Heritage Auctions for image, Mary Gillick for coin - Newman Numismatic Portal, Public Domain, Link

The Good Wife

A good wife is essential for any man determined to put aside money for future generations. Not only does he need a mother for his children, he needs someone willing to go along with his project. Without this, the project is unlikely to go anywhere.

Where most young men go astray is that they look for a mother without paying sufficient attention to whether she is interested in the overall project. She may be an excellent vessel for carrying a child. However, if she is a self centered spend thrift, the children are unlikely to get much in the way of inheritance.

In addition to being sufficiently passionate and intelligent to be interesting, the mother has to be thrifty. Her children are not merely offspring. They are the future stewards of the family estate. As such, we cannot take out too much for ourselves. There has to be enough left for future generations to carry on the tradition.

This has been the mantra of the wealth carrying side of my family for at least five hundred years, and I would hate to see this line terminate with me. My motivation for carrying on the tradition of saving is therefore strong. The same must have been true for all of my wealthy ancestors. It has certainly been so for my parents and grand parents.

Both my father and grandfather married well. My mother came from a modest background, and so did my grandmother. What they had in common was a tradition of modesty. They were middle class with a desire for upward mobility, not just for themselves, but for their children as well. They wanted to become part of the sort of project that my father and grandfather were involved in.

In contrast, my first wife was middle class with a desire for upward mobility, only for herself. There was little tradition of modesty in her family. Life was to be enjoyed to the maximum, and no savings were to be left behind. Consequently, my ex acted as if she was determine to make me the end of a five hundred year line of thrift. Unable to change her ways, I had to terminate the marriage before it was too late.

In my second marriage, I've been much more lucky. My wife is all in on our joint venture. She does not view our savings as hers to spend. They belong to our son. We are merely stewards while he is too young to take care of it himself. We do not spend more than we can reasonably do without depriving our son of his savings.

Taxing Gold

Pension founds are heavily regulated and easy to tax. They are also the place where most people have their life savings. They are therefore the prime target of the state. When the next crisis strikes, pension founds will be stripped for wealth. There will be very little left for the savers.

By comparison, the gold market is tiny. Gold is also very difficult to regulate or tax. The taxman is reluctant to go into people's houses looking for gold. History tells him that such actions have a tendency to end with little loot and a lot of dead functionaries, the French revolution being a particularly grim example with casualties running in the thousands.

It is much better to tax through proxy. Inflation is in this respect an excellent choice. Most people do not understand inflation. Rising prices can easily be blamed on speculators and gold hoarders. A general atmosphere of hostility targeting capitalists splits the population and makes it easier for the state to come in with draconian measures. We can therefore expect pension founds to be looted primarily through inflation. It is by far the safest and easiest option.

With rampant price inflation, and a furious population venting their anger at speculators and gold hoarders, the state will be free to implement price regulations on most goods and services, as well as confiscatory sales taxes on gold and silver.

It appears then that gold hoarders like myself are no better off than the pensioners. I will be stuck with gold that I cannot sell without taxation. I too will be robbed. However, this assumes that people stay within the system even when it is falling apart. That is not how the world works.

When my father bought his first flat in Norway back in the 1950's, he paid a regulated sum to the seller. He also paid a substantial amount in cash, completely unregulated. The true price for the apartment was the regulated sum plus the cash in hand. The seller happened to be a policeman, which proves that everyone was doing this, even functionaries of the state.

To avoid this, the state can ban cash. That way, all transactions will happen electronically. It will be easy to discover the sort of transactions my father and the policeman engaged in. However, if there is rampant price inflation, the seller may in fact prefer something other than cash. A gold bar would fit that bill. I can therefore do exactly what my father did 65 years ago. I make an official, highly regulated, bank transfer to the seller. Then I slip a bar of gold into his hand before we sign the contract.

The only taxation possible on this transaction would be on the official sales price, which the state has regulated downwards. The net result is that the state collects less taxes than what had been possible had prices been unregulated. But even if prices remain unregulated, allowing for higher taxes, both seller and buyer may prefer gold. Rampant price inflation, combined with heavy taxation on transactions will in themselves make gold the preferred medium of exchange.

  

Sovereign

By Heritage Auctions for image, Mary Gillick for coin - Newman Numismatic Portal, Public Domain, Link

The Pension Trap

The rational behind pension funds is that it takes expert insight and iron discipline to build up a reliable pension. It is also assumed that most people cannot put aside enough savings for the eventuality that they live longer than average. The pension fund takes on the risk of longevity by averaging out the cost between those who live long and those who live short lives.

However, none of these assumptions are true. It does not take expert knowledge to make prudent investments. As long as we stay clear of debt, save in gold while the Dow/Gold ratio is above 7, and save in stocks when the ratio is below 7, we are practically assured a good return on our savings. If we make it a habit to save regularly, success is pretty much assured.

The idea that we might outlive our savings is largely wrong. It assumes that there is some limit at which we cannot save more. While this is true for those saving cash in a bank account, due to inflation. This is not true for other types of saving. Inflation will typically limit the purchasing power of cash savings to a decade or two, no matter how much we try to save. But gold and shares do not behave this way.

On the other hand, pension funds are limited in the way they save. They have to be invested in stocks and bonds, and are largely prevented from saving in gold. They are regulated by politicians, who take advantage of them by forcing them to save in instruments that benefit the political elite at the expense of the saver.

The investment structure forced upon pension funds requires stable economic growth and above 6% interest rates to work. Neither of these conditions have been present the last 20 years. We have had wild fluctuations in the financial markets, and interest rates have been low. The result of this is that all pension funds are underfunded. They will have to default on their promises at some point. People thinking themselves safe from old age worries based on their pension promises are either ignorant of the current precarious position of pension funds, or deluding themselves.

However, the biggest problem with pension funds is not the fact that they are underfunded. Rather, it is their remoteness from direct access by the saver. They cannot typically be sold, or otherwise converted into ready cash. Also, first in line to the pension fund's savings is the state, not the saver. If the state needs some extra cash, it can easily make a law requiring pension funds to buy some worthless state debt. This is already happening, and the trend appears to be accelerating.

Furthermore, those of us who get in trouble with the taxman are cut off from our savings. I never intended to get in trouble. But faced with a confiscatory tax, I had little choice but to stop paying my taxes. If my savings had been mainly in pension funds, I would have been trapped. The cost of disobedience to the state would have been too high.

Luckily for me, I had little savings in pension funds. Most of it was in an underfunded pension fund in Holland. My future pay out was only going to last me a few weeks every year. Besides, they had stopped recognizing me. Being a foreign national, they were making themselves difficult. They were clearly trying to cut me off. I had little to loose by giving up on my claim entirely.

The irony of this is that if I had been buying gold coins for the money I was forced to put into the pension fund while I was working in Holland, I would have had a great deal more savings to draw on by now. Rather than enriching me and securing me, the pension fund robbed me, and it put me in a precarious situation. Pension funds are no longer an insurance for the future. They are traps that tap into our savings, leaving us all the more exposed and vulnerable by the time we reach old age.

Taming Frivolity

Jordan Peterson makes an interesting observation in his book, 12 Rules for Life. We tend to care more for our loved ones than we care for ourselves. A sick child or a sick parent is watched closely. Even a sick pet is taken care of. However, if we feel a little ill ourselves, we have a tendency to ignore it.

We tend to be more careful with our loved ones than ourselves. We do not put our loved ones in precarious situation. We do not gamble with what belongs to our nearest and dearest.

On the other hand, there is a tendency among most of us to take on more risk than is good for ourselves. We gamble with ourselves and our possessions. More often than not, this leads to loss.

The logical conclusion is that we should as much as possible invest on behalf of our loved ones. This will sharpen our attention. It will make us more risk aware.

I have a 7 year old son here in Porto, and I have made it a habit to think of my savings as his. He owns gold, real-estate and cash. These are good solid investments doing predictably well. The allocations are spread out. I have not made any excessive bets. This is in stark contrast to how I went about my investments when I viewed it as my personal enterprise. I made big bets for no good reason at all.

The interesting thing about this is that I feel doubly blessed when my son's investments do well. I'm full of good feelings and hope for my son. I am also relaxed about the situation. I know that the positions are sound. They are neither too conservative nor too risky. I've done my homework.

I also have three grown children in Norway. Knowing how frivolously I went about my own investments in the past, I could have decided to hold onto my inherited fortune, just to be on the safe side. However, I believe I chose the more sensible route when I decided to pass my fortune onto them together with a caveat. While they own the inherited wealth, and can do with it whatever they please, they are obliged to take care of me for the foreseeable future. Half of their capital income is going to me.

By doing this, I install the obligation of care into the inheritance. This in turn makes them much less likely to gamble.

A further advantage that comes with this arrangement is that it frees up time, because gambling is not only wasteful in terms of money, it is also a giant distraction. Gamblers spend their days looking at charts, obsessing about every little move. It takes attention away from meaningful activities. By removing the temptation to gamble, I make it easier for my children to focus their time and energy on their talents. Without the distraction of gambling, they will live better than they otherwise would.

While Bitcoin has Everybody's Attention

Bitcoin is again catching everybody's attention. It has had a nice run up towards 4000, and optimistic comments are everywhere. This is the beginning of a run to 15000 and beyond, they claim.

Meanwhile, gold is pushing up through heavy resistance at 1330 per ounce.

It is almost as if Bitcoin is intentionally drawing attention away from gold. The situation reminds me of 2017 when I had to decide on what to do with the money I had received from the sale of my house in Norway. Had I listened to the chatter and "advice" of the time, I would have put some of the money in Bitcoin and the rest in shares.

However, I had done my homework. I knew that gold was cheep relative to all other assets. I also knew that technology cannot ever be money. Technology changes. Old technology becomes obsolete. It becomes worthless within a few decades at the most. I decided to use the money to pay down all debt, buy gold for most of the remaining, and leave the rest in a savings account.

As it happens, nothing has performed better than that particular combination. Bitcoin crashed during 2018 and stocks have under-performed gold.

Nothing has fundamentally changed since I made my decision in 2017, and while gold has done well, it has not done so spectacular that a major pull back can be expected. If there is a pullback, I will add to my stash. But I wouldn't bet on it happening. Gold can just as well break through the resistance and head substantially higher without any pullback at all.

If Everyone Did What I've Done

Two years have passed since I executed the plan laid out in my book Gold Oriented Investing. I have no debt, I own no shares and I have most of my savings in gold. I have also made myself impossible to tax.

The result so far has been good. My costs have gone down, and my savings have done well. I live comfortably on a fixed income. Living modestly, it is possible to get by on a surprisingly small income. I know this, because I do so myself. I live on less than half of what is considered poverty in Norway.

Not everyone is blessed with a fixed income, so under normal circumstances I would still have to work and pay taxes on my labor. However, this would not have prevented me from executing the overall plan laid out in my book. I would still have gotten out of debt and put most of my savings in gold.

But what would happen if everyone did as I've done? Wouldn't that cause the whole system to collapse? This is the question I sometimes get from friends and relatives. The short answer is that a great deal of good would come from this. The system would not collapse. It would merely change for the better.

The way things are today, the state is able to squander a great deal of resources on destructive projects. The richer the state, the more destructive and insane are its projects. Norway is an example of this. It was one of the biggest contributors to the Libya bombing campaign. It has the biggest most bloated child protection service on the planet. It engages in all sorts of social engineering, including the wholesale import of young uneducated men from Africa.

None of this is making life better for the average Norwegian, and all of it is funded through taxation and debt. If everyone did as I've done, there would be dramatically less income to tax, and debt would be prohibitively expensive. Civil servants would suddenly have to make the difficult choice between, bombing campaigns and paying their own salaries. The state would have to shrink. Resources would then be freed up for other purposes.

Another change that would come from this is that stocks, bonds, and real-estate would come down in price by quite a lot. This too would be to the benefit of most people. It is today close to impossible to acquire enough wealth to live off capital income. Pension funds are therefore close to bankrupt. However, were stock prices to come down substantially over the next few years, it would still be possible to buy enough of shares to build a decent pension.

A further advantage would be a return to stability in financial markets. The Dow/Gold ratio would settle around its historic average of about 7, where it would hover, with a slight upward tendency over time. There would be little room for speculation. Stocks would be bought for their dividend. Any type of manipulation would be met with investors either buying the dip below 7 or selling the rip above 7.

This in turn would make it easier for real wealth generating projects to get reasonably priced resources. Speculative projects with little to offer in terms of wealth generation will find it much harder to compete for these same resources. Without access to cheap credit, wildly speculative projects will die even before they are born.

The idea that I am somehow leaching off society by refusing to work is based on the idea that labor rather than capital is the main driver of wealth. This is patently wrong, even if it seems intuitively right. It is perfectly possible to imagine a world in which machines make all the things we require. On the other hand, it is impossible to imagine a world in which labor on its own, with no tools or machines, is even close to sustain the current population.

Making sure that capital is placed in sustainable projects is all that is needed in order to put the world back in order. Getting out of debt and reducing our tax burden to a minimum is the first step in that direction. Refusing to buy stocks when the Dow/Gold ratio is above 7 is another step. Refusing to support the banking system by saving in physical gold rather than currency is another step still.

The great thing about this type of disobedience is that it carries very little risk. We do not have to risk life or limbs fighting in the street. On the contrary, there are good reasons to believe that we will be better off. The Dow/Gold ratio is currently above 21. House prices and bond prices are bloated. Getting out of these assets and into gold is likely to yield a good return regardless of whether people adopt my plan or not.

Silje fled to Poland where she received political asylum

Silje from Oslo is the first Norwegian citizen to receive political asylum in an EU country.

Translated from an original article in Norwegian.

By Finn-Ove Hågensen, February 14 2019

She took her half year old daughter and fled Norway for Poland in May 2017. There she received help and support.

The leader for the organization Ordu Iuris in Polen, lawyer Jerzy Kwasniewski, has helped her apply for political asylum. He tells TV 2 that the acceptance of the application is based on the official view in Poland that Silje's human rights were violated in Norway.

– The Norwegian child protection office broke article 8 of the human rights convention, which lays out rights related to family life, he tells TV 2.

Very sad

Silje feared that the child protection service would take her daughter away from her.

– I am relieved that the fight is over. However, it is very sad that I had to do this. I feel myself very badly treated by the Norwegian child protection service, she says to TV 2.

Silje is the only Norwegian citizen to have received political asylum in an EU country.

– This is a case between her and Polish authorities, and it is up to the Polish authorities to explain their decision. We have nothing further to say, states the Norwegian Foreign office in response to questions from TV 2.

Was arrested

The Norwegian child protection service does not want to comment on this case. However, Silje would have liked a formal excuse from them. During during Silje's initial stay in Poland back in 2017, she twice received letters stating that her child was to be transferred to the child protection services. Both letters were later retracted. They had called on Interpol to track her down in back in 2015. She was arrested by Spanish police in Spain, and brought back to Norway. However, the case against her was dismissed. She had engaged in no crime.

She feels that a formal excuse would be in order.

– All they need to do is say they're sorry. It doesn't take more than that, she tells TV 2.

  

Poland

By Kriksos - Own work, CC BY 3.0, Link

China's Gold

As the saying goes, "if you borrow hundred dollars from the bank, you got a problem, if you borrow a billion dollars from the bank, the bank got a problem".

In the world today, China got a problem. They lent trillions of dollars to the US. Furthermore, the US used a large part of this money to build weapons to point at China. Needless to say, China is not happy. However, there is not much else that China can do with its reserves. With populism on the rise, it's becoming increasingly clear that foreign debt cannot be trusted. Much of it will either be inflated away or defaulted on.

Additionally, China has ambitions of becoming the dominant economic and military power of the world. Lending money to hostile foreigners unwilling or unable to pay will not lead China to world domination. What is required is a sustained build up of military power, combined with a strong currency.

With wars being horrendously expensive to wage, military might should be wielded as a threatening stick. War should only be waged when all other options fail. Economic might is by far the best way to gain dominance. Not only does this make politicians powerful, it makes the populace prosperous and therefore unlikely to topple the status quo. It is a win win path to domination.

China's main strategic goal today is likely to be economic rather than military. China is almost certainly aiming to dethrone the dollar as the world reserve currency. To do this, they need to make the Chinese yuan more desirable than the dollar. They need to give it a quality that the dollar doesn't have.

The yuan will not replace the dollar before it has all the qualities of the dollar, and something more. The Chinese have therefore implemented some changes to bring it up to par with the dollar. They have opened an oil exchange that trades in yuan, and they have opened a gold exchange that trades in yuan. Other commodities are also traded in yuan.

The next step will be aimed towards making the yuan better than the dollar. The gold analyst Alasdair Macleod thinks that China will aim to have their currency backed by more gold than the dollar. Neither the dollar nor the yuan is today directly linked to god. However, both the Chinese and US allow for people to freely buy gold. There is an indirect link between gold and these currencies.

If China can amass more gold than the US, then the yuan will fall less relative to gold than the dollar when the next currency crisis strikes.

In this perspective, it is interesting to note that the yuan has recently been pegged to gold rather than the dollar. China has also started to announce increases in their gold holdings. This adds up to a managed transition away from the dollar and over to gold. The yuan will be brought in line with the gold price in such a way that every yuan is backed by a substantial amount of gold. Assuming that China has already amassed a large amount of gold, the yuan needs only a small devaluation against gold in order to be considered as good as gold. This cannot be said of the dollar.

When the next currency crisis hits, the dollar will see massive depreciation relative to gold. The yuan is likely to fare much better, and as a result, people will start preferring the yuan over the dollar in international trade. The yuan will become the new reserve currency.

Gold bars

By Agnico-Eagle - Agnico-Eagle Mines Limited, CC0, Link

Opinions Masquerading as Facts

My favorite Latin phrase is "navigare necesse est, vivere non est necesse". It means that we must navigate, even if life itself has no real meaning. As long as we live, we must navigate based on what we know.

This is much more difficult than many think, because we know much less than we think we do. Many of the facts presented to us are mere opinions, and many of these are dubious at best. We are for instance told that stars and planets are created through gravity. However, the fact that gravity cannot actually do this has been known to scientists for decades. It is nevertheless taught in school as a fact. Plate tectonics is also taught in school, and presented as fact. The internal makeup of our planet as well. None of this is very well founded. The evidence to support this is extremely flimsy.

By repeatedly presenting opinion as evidence, we indoctrinate our children into a mindset in which the opinions of experts are considered facts. As adults we become easily led. All that is required is to set up a panel of experts. Whatever this panel tells us will be believed by most of us.

When opinions becomes facts, strange things happen. What is currently going on in Norwegian politics is an example of this. Norway has one of the best funded and most powerful child protecting service on the planet. Their opinions are so valued that they count as evidence in court. Children are taken away from their parents based solely on the opinions of the child protecting service.

When the child protecting service recently got criticized by Polish diplomats in Norway, the organization responded by venting a negative opinion of one of the diplomats. This in turn was taken as facts by the Norwegian Foreign office leading them to expel the diplomat in question. Never was there any demand for physical evidence. The opinion of the experts in the child protection service was taken as evidence in itself.

The result of this is that Norway now is in the embarrassing situation where the Foreign office has to admit to the world that the opinion of experts are used as facts inside the Norwegian legal system.

As individuals, we should take note of this. We must always ask ourselves if evidence presented to us is fact or mere opinion. If we start navigating according to opinion, we will sooner or later get ourselves into trouble. We may find ourselves wasting time over non-issues, squandering our time and resources on things that in the end is nothing more than opinion.

That's why I waste no time on climate change issues. However, I do take an active interest in what's going on in the Norwegian child protection service. I have a friend from high school who lost her daughter to this organization. The court case was a sham. The opinion of the experts was enough to declare her unfit to be the mother of her own daughter. Since I know the woman personally, I know that she would never hurt anyone, least of all her own daughter. She was as loving a mother as any. Her only crime was her somewhat eccentric opinions and world view. That caught the attention of the experts and formed the basis of the case against her.

The case of my friend is a real problem based on evidence personally observed by me. I know for a fact that the child protecting service in Norway has way too much power, that they should be stripped of their ability to present opinions as facts. This problem is real and therefore worth my time and energy. Time spent on helping my friend and other people in her situation will never be a complete waste.

By Alexander Turnbull Library, National Library NZ on The Commons - originally posted to Flickr as Ship Garthsnaid, ca 1920s, Public Domain, Link

Norwegian consul no longer wanted in Poland

The Norwegian foreign office declared the Polish consul Slawomir Kowalski unwanted in Norway. Poland replied by declaring a Norwegian diplomat unwanted in Poland.

Translated from an original article by NRK.
Source: NTB/NRK
Published February 11 2019

– The way things have developed, and in line with international practice, a Norwegian diplomat is no longer welcome in Poland, according to a declaration from the Polish foreign office Monday evening.

– It is disappointing that Poland chooses this type of retaliation, writes chief communication officer Kristin Enstad in an e-mail to NRK.

Earlier, Monday morning, Ernstad informed NTB that Poland's consul Slawomir Kowalski has been declared unwanted as diplomat in Norway.

– This was necessary because his personal behavior is incompatible with his role as a diplomat.

The foreign office has received repeated complaints against the consul, who has allegedly behaved in a threatening and violent manner against public officers, preventing them from doing their work, writes NTB.

He has also refused to comply with police orders, and has at times been reported to the police. The consul's behavior has been a repeated topic of discussion with the Polish embassy over the years.

Enstad writes that the Foreign office has received no complaints regarding the behavior of Norwegian diplomats in Poland.

– It is therefore unreasonable that Poland should choose to expel a Norwegian diplomat, writes Enstad.

Forced to declare him unwanted

According to the Vienna convention on diplomatic relations, Norway has a right to declare diplomats unwanted in Norway. This implies, according to the Norwegian Foreign office, a duty on the part of Poland to recall the diplomat or terminate his function at the embassy.

– The Foreign office recommended [in January] that Polish authorities bring home the consul, which is normal procedure before anyone is dismissed from their function with loss of diplomatic immunity in Norway. Now that this recommendation has been ignored, the Foreign office has no choice but to declare him unwanted in Norway, informs Enstad.

Conflicts involving the Norwegian child protection service

Kowalski has at several occasions been mentioned in Norwegian media in relation to cases tied to the Norwegian child protection service. He has actively helped Polish families who have found themselves in conflict with Norway's child protection service.

The Foreign office asked Poland to recall the consul in January. However, Poland's foreign minister Jacek Czaputowicz dismissed this request shortly thereafter, informing Norwegian authorities that the consul would serve his full term with termination in June.

The Polish Foreign office writes on Twitter that the charges against Kowalski are unfounded, and that they are er «pleased with Kowalski's work, in particular his engagement in defending the interests of Polish families.»

Salvini's Gold Grab

Italy's deputy prime Matteo Salvini wants to close down the Italian Central Bank. In the process, he wants to transfer the bank's gold holding to the state.

The central bank holds 2452 tonnes of gold with a current value of 103 billion dollars. Against this, the state owes 2.34 trillion euros. This means that a sale of the gold in order to pay down on the debt would be futile. However, once the gold is in the hands of the state, the state can default on its debt. It can then issue its own currency backed by gold.

If the Italian state was to do this, a whopping 2.34 trillion euros in debt would become worthless over night. Anyone holding this debt as an asset will be that much poorer. Banks and pension founds will be in trouble. There will be a great deal of hardship for savers and pensioners alike. Those with savings in banks or pension founds may see a great deal of their savings evaporate.

The correct way to hedge against this eventuality is to keep a portion of our savings outside these institutions. Exposure to fiat currencies should be kept to a minimum. Anyone with savings should protect these by owning physical gold.

Going to Jail

If they ever come to pick me up, and haul me back to Norway to stand trial, I will ask them if they like their jobs. Do they like putting fellow men in jail for refusing to pay their salaries? Their answer will of course be yes. Everyone claims to love their job. It's a lie we all tell ourselves. Then I will ask them if they would like to work for free the next five years, because that is what they are demanding from me. The taxes I have evaded amount to five years of labor.

If their answer is yes on both counts, they prove themselves to be the psychopaths that many suspect them to be. If their answer is no, they are in effect sympathizing with me.

It's not like they will answer the questions out loud. It is not their job to explain themselves to me. I'm the one that is required to answer questions. However, the question will not fail to register with them. They cannot avoid hearing the question. What they say out loud is irrelevant. It is what happens in their mind that is of interest. If they are repeatedly faced with the plain facts, they will eventually become demoralized.

Having told them that I do not intend to work for free, I will tell them honestly that I would rather go to jail than to an office. Office life is stressful. It is not at all as pleasant and laid back as it is portrayed in popular culture. Going to jail on the other hand means free lodging and no other concern than to stay away from the bullies. There are no demanding customers to deal with. There are no great responsibilities. There are no pesky colleagues sucking up to the boss. There's just a bunch of guys having tried, and in most cases failed, to evade the system.

It's not like I will be put in jail together with murderers and rapists. There are special jails for tax evaders and fraudsters like me. Besides, Norway has one of the best prison systems in the world. The food is excellent. Every inmate has his own room, and there are all sorts of amenities. Life in prison will not be all that different from the life I lead now. I will be separated from my wife and son here in Portugal, but it will only be for a few months.

I will explain this to the prosecutors. I will tell them that I'd rather go to jail than to the office, and a few of them may silently envy me. I'm not the only one who hates office life. There might be one or two among the psychopaths who dislike their colleagues and their constant nagging, petty concerns and bragging. They may not all find sufficient pleasure in throwing people in jail to make up for the constant unease they feel from being surrounded by brutes.

By the end of what will be a short trial, the prosecutors will have been reminded of the rather obvious fact that they are surrounded by psychopaths and that their office lives are in many ways more miserable than life in jail.

Full Steam Ahead for Inflation

With politicians no longer concerned with deficits and preferring inflation over taxation as a means to finance their projects, we should soon see some hard evidence for inflation, and as it happens, this is exactly what we find when we look at the balance sheets of primary dealers of US debt.

Primary dealers are banks that buy debt issued by the government with the chartered purpose of selling it to investors. These banks act as wholesalers. They buy big quantities of debt that they sell in smaller chunks to actual investors.

These banks can do this because they have the chartered right to print money. There is no practical limit to how much US debt these banks can buy. They are only limited by regulations laid out by politicians.

Primary dealing is pure inflation. Every penny used is conjured into existence from nothing. It is only when the wholesale debt is sold on to investors that the debt gets matched with real assets. As long as the debt is held by primary dealers, no actual resources are involved. The volume of currency is increased without a corresponding increase in resources.

It is therefore a sign of rampant inflation when primary dealers start hoarding US debt. This is going on right now, which means that the government has received a lot of currency with no matching resources. When the government goes out to spend this money, it will drive up prices. The result will be price inflation on whatever government and government workers spend their money on.

The only way massive price inflation can be avoided at this point is if primary dealers succeed in passing the debt onto real investors who will give real resources in exchange for the debt. This happened during the last big debt spree by the US government, and some believe that this will soon happen again. However, with the US government acting aggressively towards foreign nations that have traditionally stepped in to buy debt, and with pension funds starved for money, this seems unlikely.

The only buyer that is likely to come in to buy the debt currently piling up at the primary dealers is the bank of all banks. The Federal Reserve, with an unlimited capacity to print money will soon appear as the buyer of last resort. However, the Federal Reserve is no more a fountain of real resources than primary dealers. It does not matter if the debt is hoarded by the dealers or by the Fed. Government and government workers will compete with the average Joe and his hard earned money. They will drive prices up, leaving Joe poorer in the process.

By AgnosticPreachersKid - Own work, CC BY-SA 3.0, Link

Resisting Under Torture

I've heard surprisingly little from the taxman since I stopped paying my taxes. Once it was clear to him that all my assets were out of reach, he stopped contacting me directly. Instead, a private debt collector sent me an obscure e-mail half a year ago, asking me to contact them, which I didn't. Two days ago I had a missed call from them. Needless to say, I haven't called them back.

I get the occasional standard letter from the taxman, reminding me of my taxes outstanding. I get the occasional call from the debt collector. That's it. I had half expected a couple of thugs at the door by now, hauling me back to Norway for me to serve a lengthy prison term, and I'm still thinking that this might happen. However, the more time passes without anything sinister happening, the more confident I'm getting that they will drop the whole thing and let it pass.

It's not like I owe them all that much money. They can easily let it pass. But if they do, and it becomes widely known that people can do what I have done, there may suddenly be an exodus of wealthy individuals opting to pull out of the system until something less predatory replaces it. What are they going to do then?

The big problem for the state is that people have become less accepting of physical abuses by it. Only a century ago, firing squads were used for deserters from the army. Men, so traumatized by war that they could hardly stand up were put up against a wall and shot. This was then communicated to their parents and families. Hundred years before this, public hangings were quite common, and hundred years before then, torture was part of such executions.

But the public has become increasingly opposed to this sort of entertainment. We shun brutality. Being a butcher used to be admirable. Today, you better not tell anyone that you work at the slaughter house, and if you do, don't tell them that your jobs is to put a bullet in the heads of little piglets.

Similarly, if you're a tax collector, don't tell anyone that your job is to send out threatening letters to strangers. Tell people that you are public servant.

There was a case in Norway a few years back. The tax collector wanted to make an example of our most famous contemporary painter, Odd Nerdrum. He had failed to declare a couple of painting he had hanging on his wall at home. These were paintings that he had painted himself and therefore very valuable. Since Norway has a wealth tax, Nerdrum should have paid an annual fee to the state for these painting. Failing to do so was a grave case of tax evasion.

They tossed the man in jail for 2 years, and they made sure he was prevented from anything remotely related to painting. A prison guard once found some paper and crayons hidden under the man's mattress. They were promptly confiscated. Nerdrum was severely reprimanded for his miss-conduct. This was of course modern day torture, and it was plain to see that the man was suffering.

Then, something interesting happened. Instead of public outrage against Odd Nerdrum for having had the gal to hang unreported paintings on his wall, and for smuggling crayons into his prison cell, people turned against the taxman and the prison guard. Tax collectors all over the country had to keep a low profile. What used to be a noble pubic office was suddenly a shameful profession associated with sadistic sociopaths.

What was intended to be a friendly reminder to Norwegian taxpayers that they better pay their taxes or face the consequences turned into a giant PR fiasco.

Wary of their sudden loss of social status, tax collectors no longer operate under their real name. They are no longer proud of their jobs. They are shunned and despised by a large part of the population.

This may in turn explain why I have not been hauled in to court. The size of my tax evasion is not big enough to warrant the cost. For all they know, I might be a man in real economic trouble. I may be shell shocked in my way. What will the judge gain by hauling me to Norway to have me locked up? He risks being seen as insensitive and even sadistic. What judge in Norway wants to be the next Odd Nerdrum executioner? The answer of course is no-one.

Adding to this that the state is in a position to print as much money as it needs, the tendency going forward is likely to be one of increasing inflation and less severe enforcement of the tax code.

As our culture continues to soften, direct taxation will become increasingly difficult to enforce. Unless something is registered and easily accessible by the state, it cannot be taxed. The poor and the middle class will become increasingly burdened by inflation and taxation while the rich will get a free pass.

My vision of myself, tortured by the taxman, refusing to tell him where the loot is, will for ever be a fantasy. No-one will come knocking on my door, hauling me off to a dark basement, kicking and miss-treating me until I give in and pay them their fair share of my stash.

Practical Politics

Politics is mostly about culture. If the culture in an area is benign and respecting of life and property, the laws of that area will be benign. If the culture is one of hierarchy and oppression, so will be the laws. It matters little if the place is a dictatorship, a democracy or a republic.

Culture in turn is something that is carried from one generation to another. Give a generation freedom to act irresponsibly, and that generation will become irresponsible. Demand responsibility from an early age and the culture will turn towards responsibility.

Climate and geography are also factors in shaping a culture. Holland lies mostly below sea level. If the people of Holland stop maintaining their sea walls and pumps, they will die. Holland was created through engineering and strong property rights. If you could pump water out of an area, and maintain the sea walls, the property was yours to keep. Take this away from the Dutch, and disaster is sure to follow.

Scandinavia is a place where it is so cold during winter that people will freeze to death if they do not make sure they have sufficient energy to heat their houses for half a year. This requires planning and saving. Effort has to be made during summer so that survival through winter is possible. Scandinavians are for this reason obsessive savers and investors.

Places like Africa, on the other hand, where people grow food all year long, and a few woolly blankets keep people warm through the night, there is no need to save. Engineering is not of vital importance either. The culture can focus on theater and religion. Every night is a party. Every day is sunny. There is no urgency. Things can wait.

There are a lot of inefficiencies in Africa largely because it is possible for this to be the case without killing off the entire population. The Scandinavians and Dutch became industrious investors because they had to in order to survive. There is no such need in Africa. African countries that develop industries do so because they can, not because they have to.

The practical function of culture is to bring forward a type of behavior from one generation to another. We find that something work for ourselves, so we promote this in our children. We also have ideas about how to improve things, so we make these suggestions to friends and family. There is a level of experimentation within every culture. Yet, they tend to remain remarkably constant.

The constancy of cultures can be explained in Darwinian terms. Most suggestions are not all that good. Bad ideas result in loss. Really bad ideas result in death.

Irresponsible cultures tend to die out over time. While this is especially true in harsh environments, it is also true in places like Africa. They may not be facing a harsh winter every year, but every now and again, there is a drought or a war or some other catastrophe. This is when culture becomes important. Those who have a culture of saving and investment are more likely to survive than those that live from day to day in the belief that there will always be food available in the local market.

However, when times are good, irresponsible cultures tend to grow. Why work hard when things are handed out to us for free? There is a tendency in both Holland and Scandinavia to pamper children. The impulse for this is natural, we like the idea of carefree living. Why not create this for our children?

This has led to a growing culture of entitlement which is now starting to dominate politics. People growing up with the idea that they should be taken care of by others will find it natural that the state takes on the role as a benevolent father.

This trend in Western culture is largely due to the way we bring up our children, and how we distribute responsibility among ourselves. We let our children free to live careless lives. We keep the responsibilities for property and income to ourselves. This is a mistake. Our children are becoming incapable of taking care of themselves. If we do not change this trend, things are likely to end badly, especially in places where frivolity has had a history of ending in death.

One way of ensuring that a healthy culture is transferred to our children is by giving them responsibilities early. I have transferred all my risky assets into the hands of my children. None of them are more than 30 years old.

Along with this gift I gave them an instruction. They are not to sell or borrow on the shares they have acquired, and they have to pay half of the capital income to me. They are to act as guardians of the estate and as my benefactor. If they screw this up, they will not only loose money themselves, they will put their father at risk as well.

Needless to say, my children feel the full burden of responsibility. They are very much aware of the severity of the situation. They get half their capital income to spend as they please, the rest is for the up-keeping of their father's modest lifestyle.

An interesting side-effect of this arrangement is that my children are becoming rather well thought of among their friends. Forced to act responsibly, they permeate an air of maturity. This is a very attractive quality, especially to potential mates. My children are not playboys with a rich father. They are wealthy young adults with a father that they have to take care of.

My gift to my children is not only affecting my children, but their friends and associates as well. Responsibility is suddenly a thing. Having a rich father is cool. However, being wealthy with the responsibility that it carries is better.

This is of course just a drop in the ocean when it comes to politics. But if a large enough number of people my age start handing responsibilities over to our children, culture will change, and so will politics. Frivolous ideas will no longer gain traction. Freedom with responsibility will once again be the mark of good politics.

Pulling Investments Off the Table

Once I decided to evade my taxes in Norway, I had no choice but to pull my investments off the table. Everything had to be sold and transferred into the hands of others. The process was painful and depressing. I was not fully prepared to give up on Norway. However, as soon as the transactions were complete, I experienced a tremendous sense of relief. My ship had finally come in. The treasures were safely ashore and tucked away.

A wonderful benefit that comes with my current position is that I care much less about politics. I do not worry about tax rates. I do not worry about public debt. I do not worry about inflation. It does not irritate me that politicians squander money on idiotic projects. I can rest assured that it is not my money that they spend.

This does not mean that I do not follow politics. On the contrary, there are plenty of things I keep an eye on. This is because morality and economy are closely linked. It is possible to predict future economic growth based on the level of frivolity and hubris in society. This is an age old insight. When people believe themselves to be the only force in the universe, capable of making God like decisions, a great fall is about to happen.

History books are full of this. All empires have ended in disaster. At their peak, all empires turn to hubris and frivolity. Everything gets focused around control and trickery. Money is debased. Social engineering like the Inquisition or Eugenics become a thing. Identity politics and self centered obsessions like man made global warming are suddenly the main concern of everyone. Everything becomes centered around the artificial reality created in the minds of "intellectuals". The idea that nature may not care one bit about us, and will do its own thing regardless, becomes profanity of the highest order.

When such nonsense reach the sort of fever pitch levels that we see today, it's usually a sign that things are about to get nasty. Add to this that the Dow-Gold ratio is close to its historic highs, and it's clear that the odds are in favor of pulling investments off the table.

The fact that I had to take action early due to my decision to evade a confiscatory tax, may turn out to have been my lucky break. Being among the so called "rich" and therefore a target of confiscatory taxes, I had to do early what a lot of people will want to do in the coming years. With politicians pretty much out of control, policies that currently only apply to the "rich", will soon apply to the middle class as well. There will be a rush to the exit. Gold will go higher and stocks will go down.

When the Dow-Gold ratio goes below 7, I will start moving money back into stocks. My plan is to invest in the Portuguese stock market which is already down 60% in Euro terms from its peak 20 years ago. I Expect it to fall a further 50% over the next few years, which would bring it down to about 10% of its all time peak. In terms of gold, the stock market will be down a staggering 99% relative to its 1998 peak.

Capital

Capital is the harvesters used by the farmer to bring in the wheat. It is the hammer used by the carpenter to build a house. It is the machines used by the factory workers to build cars and refrigerators. Take capital away, and everything would come to a complete stop. There would be no more food, no more fuel, no electricity. We would all die.

Redistribution of capital is likewise a bad idea. Taking the carpenter's hammer away from him to give to another will not only be detrimental to the carpenter, but also to all his clients. Take the machines away from the factory owner, and things would quickly grind to a halt. The workers can operate the machines for a while without the owner directing the business. But without any long term incentive to invest, there will be a general shift from production to consumption.

Under a socialist model where the means of production are owned by the workers, every worker knows that he will only be paid as long as he works. He is therefore motivated towards immediate consumption at the expense of long term investing. Investing in production that will only take place after he is gone makes no sense for the worker.

However, in a system where capital is owned by the original investor there is plenty of reasons to invest. A modern factory is more worth than a worn down factory. It can be sold for more money. It will also last longer, making it possible for children and grand children to benefit from investments made today. Capital can in this way transcend the individual investor and become an organism of immense longevity.

The family fortune I inherited from my father can be traced back to the early 1500s. It is at least 500 years old. Of course, had no investments been made along the way, there would have been nothing left of this fortune by now. However, every single generation was able to protect it sufficiently to pass something on to the next generation.

My fortune is a multi-generational organism of which I am but one owner. If I fail to pass the fortune on, I break a chain that is more than 500 years long. I will be the evolutionary dead end of my lucky part. This is why I've decided to spend some time investigating the mechanics of investing, and to put my findings down in a book. I wrote "Gold Oriented Investing" with the intent of giving my children a recipe to follow in which excessive risk taking is avoided while at the same time ensuring that wealth is sufficiently accumulated to last another generation.

I never got any book or advice from anyone because my parents and their parents have relied on hard work and conservative investing in order to preserve the wealth that they inherited. They had no further advice to give, and there was therefore no book for me to read.

But the strategy that my parents and grand parents have followed has not yielded the same good results as prior generations. There has been a clear overall decline in wealth over the generations. My great-great grandfather lived in a palace. My great grandfather lived in a mansion. My grandfather lived in an elegant townhouse. My father owned a large house. My brothers and I live in relatively modest houses. These generations have not been able to accumulate sufficient capital to pass on a significant surplus to their children. They have been able to maintain and even grow the wealth modestly, but not enough to spread it out on all their children.

It should be noted that a family fortune needs only to grow by 5% per year to be passed onto three children as big as the original. Yet my parents were not able to do this, despite working hard in well paying jobs.

The reason for this has to do with the confiscatory nature of modern taxation and central banking. The system is rigged. There is an expressed intent by most central bankers these days to extract 2% of a nation's wealth annually through inflation. There is a 2% inflation goal. Wealth tax and property tax consume a further 1%. Income tax cap the ability of people to accumulate wealth. All taken together, 5% annual growth in savings is close to impossible unless taxation and inflation is avoided.

A sad consequence of the sort of confiscatory taxation and inflation regime that we currently live under is that it encourages excessive risk taking and over-consumption. We make high risk bets in the off chance that it may pay off big. Windfalls are consumed quickly in order to beat the inflationary monster. Once victim to this kind of mentality, we soon see our wealth dwindle even faster.

The only way out of this mess is to focus our attention towards the mechanics of the system and act rationally and dispassionately according to what we find. Inflation can for example be avoided by owning gold rather than cash. Taxes can be avoided by selling everything that carries a tax. There is also the option of tax evasion.

Keep in mind that taxation is always on savings. We need to set aside money to pay taxes. Setting aside money is to save money. When the taxman comes to collect his fair share, he is essentially taking our savings. The time spent accumulating these savings is time spent working for the taxman. The services we receive from the state is what we get for our time in the taxman's service.

People in Norway spend about 60 to 70% of their working hours saving for the tax man. In return, they get basic education, a small pension, old people care, health care, part ownership in roads and bridges, part ownership in warplanes and bombing campaigns, part ownership in welfare projects of various kinds. The return on these investments is not exactly great.

I have personally decided to leave Norway. However, leaving Norway is not as easy as one would think. I was fined a hefty exit tax. On selling my house, I had to give the entire inflation adjusted gain to the taxman.

While it was well within my capacity to pay the tax, it was clearly confiscatory. I would have to work 3 whole years as a programmer in Portugal in order to pay this tax from my total income. However, since I would have to pay taxes on this income, I would have to work 5 years full time to pay the tax.

Another way of seeing the exit tax would be to measure it up against my consumption. I live a frugal lifestyle. The money demanded by the tax man would last me 5 years. My choice was therefore this: I could choose to pay the tax which would mean 5 years living as a slave for the taxman, with no income for me. Or I could refuse to pay and live five years as a free man off the money saved.

I chose the latter. I sold everything. I passed my inherited wealth onto my children. The remaining money was put into gold and cash. With everything out of reach from the tax man, I stopped responding to his constant nagging. He threatens me with jail. He is nasty and uncomfortable, a true parasite to be sure. However, given the prospect of 5 years as a slave, a few months in jail is hardly a threat.

By Hinrich, CC BY-SA 3.0, Link

He Who Does Not Work

My wife is suspicious of my indolent ways. I have to remind her that I'm making more money from my capital than she is from her labor, and even then she does not get it.

She cannot help thinking that he who does not work shall not eat. How is it that I can make money while doing nothing? Doesn't this amount to pure speculation or exploitation?

My wife is stuck in the dominant mindset of our time, the idea that labor is the only true measure of value, and that anyone not working is a parasite on everyone else. However, this idea is nonsense. It misses a central point which is the value of capital.

If I set up a fully automated garden that routinely produced enough food to provide the entire neighborhood with food, I would be entirely right to take it easy. Why should I labor when production is ensured?

This is the essence of capitalism. It is not labor that is the main contributor to the creation of value. It is capital. Labor has at times nothing to do with it. In fact, labor is often destructive.

A distant relative of mine was once a billionaire. His company is now bankrupt thanks to too much activity on his part. If he had sold everything at the peak, and put the money in gold, index funds and real estate, he would have saved himself a fortune.

He would also have saved a large number of people from engaging in futile activities. Not only was his own labor wasteful and destructive, so was the labor of everyone else involved in the failed venture.

My distant relative was a victim of the same mindset that has confused my wife. He was convinced that value was connected to his labor. This is the only way I can explain his irrational behavior. Why else didn't he cash out when he was rich enough to maintain an opulent lifestyle for generations to come?

It is easy to scoff at this as "easy come easy go". However, there is a huge loss to society as a result of this. Precious resources were squandered. We would have all been better off if he had taken his profits, especially if the new owners would have unwound the operation while it was still making a profit.

The capitalist, as he is portrayed in popular culture is a busy man. He is somehow endowed with a fantastic mind, able to produce vastly more value than us mere mortals. This is pure nonsense, and very destructive to boot. The capitalist is not rich because of his labor or his fine mind. He is rich because of his capital.

By Pi3.124 - Own work, CC BY-SA 4.0, Link

Inheritance Tax

There are some very dark clouds hanging on the horizon. Not only is Modern Monetary Theory being pushed, we are seeing increasing calls for an inheritance tax as well. Not only are our savings going to be redirected from productive ends towards bridges, war planes and social programs, these savings will be heavily taxed when we die.

We can of course ignore the clouds. The fact that they are gathering on the horizon do not necessarily mean that there will be a storm. However, the prudent thing to do under current circumstances is to get our ships to harbor, and to nail down anything that can be swept away with the wind. In practical terms, we need to get out of risky assets and into low risk assets. We must also ensure that we transfer as much wealth as possible into the hands of the younger generation.

I have done this myself. I have transferred all my risky assets to my children, I have sold my house in Norway, and I have gotten out of all debt. The surplus has been put into cash and gold. As a result I feel like a skipper standing on shore, knowing that my ship is safe, and my possessions are safely stowed away. The storm clouds are no longer a great threat. They have a certain fascination. I will watch the storm with interest from the safety of my wife's apartment, and I will thank my lucky star that I got everything safely ashore before it hit.

If the storm does not hit, and everything is plain sailing, I have not missed out on much. My children will benefit from such a lucky outcome. Without the upsets that are sure to come with a gusty storm, the risky assets I handed over to them will give a reliable return. My only loss would be the difference in appreciation between the house I sold and the gold I got in return, and so far I have been on the winning side of this transaction. House prices in Norway have been stagnant while the price of gold has inched upwards.

I have no trouble recommending anyone with adult children to do what I have done. Transfer as much wealth as possible to the children. If this is somehow made difficult by laws related to gift giving and inheritance, sell everything, buy gold coins, and hand it over privately to the children. The exact manner in which the transfer should be done depends on the law of the tax authorities. If the laws are lenient, things can be done within the law. If the laws are oppressive and confiscatory, things need to be done illegally.

In my case, I chose to break the law. I'm on the hook for tax evasion. However, since I do not own anything, there is nothing for the tax authorities to take. All they can do is arrest me, something I doubt that they will do. They gain nothing by throwing me in jail, and there is a limit to how long they can keep me locked up. I will be inside for a few months at the most.

For anyone opting for the illegal route, it is important that things get done completely and thoroughly. Everything must be done within a year. All allocations and transfers must be be done before the annual audit. By then, all wealth must be out of our accounts. Anything left will be confiscated by the state. Don't let them get anything but a few crumbs at the most.

What must also be appreciated is that the illegal route excludes us from the system for life. Everything official must be done via proxies. I have a telephone number I need to pay for. I do this by the help of one of my children who acts as a proxy. Should I at some point decide to sell gold, this too has to be done via proxies. Investments in stocks is the same story.

However, as a middle aged man with three fully grown children and a trusting wife, I have no lack of proxies to help me out, and it's not like I need their help all the time. I need my phone bill paid, and I need some cash for myself. Apart from that, everything I need is baked into the arrangement of marriage and grown children.

I risk a few months in jail. In return, I've tucked away enough wealth to last me a lifetime, and my children are secure in having received their inheritance while the rules were still allowing for this to happen.

Gold Secrets

Wealth confiscation is coming. There's little doubt about that. Taxes are already oppressive, yet most states are still running deficits. There is also a push for "intellectual" support for increased deficit spending. Modern Monetary Theory is coming, and with it comes wholesale confiscation of savings. Everyone will be part owner of some government project, and no one will own much of productive capacity. We will all be part owners of bridges, war planes, and various social projects.

With all wealth registered in central databases, be it bank accounts or registry offices, the state has easy access to all wealth. Anyone who doesn't pay their fair share of taxes will simply get their wealth confiscated by the state. Tax collectors need not leave their offices. They can make the confiscations by issuing a few simple commands on their computers.

Shares, bonds, real-estate. It's all centrally registered and easy to get at. The same is true for any derivative or paper claim to a commodity. However, physical possession of a highly mobile commodity would be close to impossible to confiscate. Imagine someone holding most of their wealth in physical gold. How on Earth is the tax man going to get hold of that?

If the gold is held in a bank box, the solution is simple. The state can issue a decree in which every bank box has to be opened, and all content registered and declared. Two armed guards show up at the bank. Every bank box is then either opened by the owner or forced open by the state authority.

Bank boxes are in other words not the right place to hide our gold.

Luckily for us, gold is very dense. A lot of wealth is packed into a small volume. It is therefore very easy to hide. Furthermore, gold does not smell, nor does it reveal itself differently from other metals when searched for by metal detectors. It can therefore be easily hidden. Even a small apartment will easily serve as a great hiding place. Spread the gold out among trusted family members makes it even more difficult to find.

Government officials used to the convenience of confiscations through computer commands will find it very strange to have to go through every sock drawer, cupboard and book shelf in a house in the hope of finding gold assumed to be in the hands of a tax evader. More likely than not, this will never happen.

For thieves to find the gold, they must somehow be informed of its existence and its proximate location. Otherwise, they would have to go through entire neighborhoods in the hope to find gold. This too is extremely unlikely to happen. Thieves will steal our TV, our PC, and our computer tablets. They may steal our silverware and other things too. But they won't dig into the special hiding spot where we keep our gold. They simply don't have the time to go through the entire house in the off chance that we may have some gold coins stored somewhere.

The trick to avoid the coming wealth confiscation currently planned by the tax authorities and central banks is to own gold. Keep it in a secret location, tell one or two trusted family members about it. Otherwise, keep it a secret. Don't act conspicuously wealthy.

Being a little ahead of the curve, I have already gone through these moves, and I have saved myself a considerable amount through the tax evasion afforded to me through my possession of gold. The gold is hidden in safe places outside the banking system. It is impossible to find by anyone not initiated into where it is located. The tax authorities may arrest me and put me in jail, but they will never find the gold.

Gold keeps its value well. It does not age or tarnish. It does not become obsolete. It will always shine and it will always be coveted as jewelry and a symbol of wealth. In times when the state starts confiscating wealth, its value increases as it becomes the only safe haven. I know this from experience, and I'm sure an increasing number of people will realize this as we slide towards totalitarianism. Gold outside the system will not only be safe, it will appreciate in value as well. Gold will soon be the best performing asset class due to its unique feature as a safe haven from government confiscation.

Modern Monetary Theory

Modern Monetary Theory is the latest darling of spend thrift politicians, always eager to find "intellectual" excuses for their projects.

The theory states that deficits do not matter for those issuing debt in currency that they control. The only thing that matters is price inflation which can be controlled through taxation.

The idea is that government can issue debt for all their projects virtually without limit. The debt issued becomes someone else's savings. The interest will always be paid because the currency is controlled by government. Price inflation will never become a problem due to taxation.

Government spending becomes in this way an engine for prosperity. However, what is forgotten in all of this is that the economy is not about money. It is about resources. Only when resources are well spent do we grow richer and better off. Government has a terrible record in this respect.

What is proposed is that government starts spending resources on its favorite projects through deficit spending. The bond holders become in this manner the owners of these projects. Savings that could have gone into producing other things become directed towards government infrastructure and welfare spending. Instead of owning a part of a refrigerator factory or some other wealth creating venture, the saver becomes part owner of a warship, bridge or welfare consumption.

With government laying its hand on a great deal of resources, prices will inevitably start going up. The savers, now owners of vast government projects rather than more expedient private projects, have to support themselves in an environment of increasing prices. Unhappy about the ricing prices, government bureaucrats will at this point step in. They will levy higher taxes on the people they have already impoverished.

The net result will be enormous miss-allocations of resources. People will be hit by both ricing prices and ricing taxes. The final destination will be a command economy much like the one experienced in Russia under communism.