Teuton Resources Corp V.TUO

Inflation Bias

[Countrygent]

Using Canada as an example, since I am familiar with our tax laws, there are structural reasons the government has a strong bias towards inflation.

Consider that inflation acts as a stealth wealth tax.  People like seeing their nominal asset values rise, whereas for the government, they have an equity interest in unrealized gains - over 20% of your gains in non-sheltered accounts at top rates (with the exception of the highly restricted contributions permitted to a TFSA), and close to 45% of retirement savings in an RRSP - plus a clawback on Old Age Security.

A little drop in the stock market causing gains to be realized is a jolt to government revenues.  

Listen to the Biden plan across the line - raise the inclusion rate for capital gains on high earners.  It’s money in the bank for the government eying all those unrealized stock market gains.

As for land, crypto, other alternate stores of wealth, they all present their own negative aspects.  Land has to be managed, it is easily taxed and subject to heavy transaction costs on purchase and sale.  Crypto or anything through the internet is essentially open and naked to advanced  esurveillance, it is opaque, it can be blocked by government oversight.  The anonymous counter party and technical agency risks are high.  Power goes out - you have nothing.  Power comes back on and you discover your wallet has no access, you are nothing.  Same for banks and brokerages if they lose or are manipulated to close out access to my accounts - I log on, I either get no access, or when I get accesss it tells me my accounts are terminated or have zero balances.  Where do I go to redress that?  To prove otherwise?  There are very few substitutes for physical wealth in the form of  money, easily tradeable physical goods or commodities, precious metals. 

In in the aftermath of the inevitable “big one” on the West Coast, there will be a period of supply implosion.  Assuming you have prudently set aside some food and water to get by for a few days or weeks, what next?  No power, no internet, no ATM, no gas pumps working, most retail not working without power.  Fuel, to escape the area if you are lucky enough to have a route not blocked by failed tunnels or bridges.  Cash, smaller denominations.  And what to trade?  And leaving aside our American friends who always reach instinctively for bibles and ammunition, because we aren’t generally armed up here ... the best I could think of was liquor.  Shelf stable and always in demand.

I’d say for me, nothing would be as comforting as being able to hide away some gold coins in sufficient value to carry living expenses for a prolonged period - portable and tradeable once out of a disaster zone.  And a moderate amount of paper money.

Not sure if an NFT of some half-rate art of monkeys eating bananas or similar is going to hold it’s value in a disorganized, stressed economy.

Call me old-fashioned.  Gold, the fiduciary par excellence, still in this marvellous age of technological advancements and miracles.

cg

[LonghandStrong]

some good points! I am also on CAD, and consider however that inflation historically punishes the "middle class" , particularly in runaway situations like in the 70's. Why? Real wages lag. Stuff gets more expensive, and the ability of the households to keep up shrinks. Their isn't a "liberal" government that sees this as an option, especially when we will soon be faced

[fordster]

SPOT ON CG....spot on. I can't tell you how many times I've gone through this scenario over and over in my head. In LA all the passes heading out are essentially formed by the San Andreas. (Historically I've noted it seems there's somehow a financial meltdown followed by or in conjunction with a major natural disaster) My gut tells me a financial situation and then the big one...no

[LonghandStrong]

what's the name of your militia? Do you form under the confederate flag?

[LonghandStrong]

so.... it's Sunday night, the big one rips, a week later, no power, no water, no food. Are you gonna trade those Maple leafs for bread? Last year, the best way I could have reduced gains was just sold my amigo holdings and offset with losses. Regional events dont disrupt global supply chains. Are you describing some sort of ELE, Yellowstone caldera lights off, nuclear war between superpowers

[LonghandStrong]

this conversation is a better example of how poor management is doing in terms of material changes and news releases. How about an update there exec? News release anyone?