Why It’s Time to Stop Taxing Gold & Silver

We've just published a detailed piece in which we make the case that it's time for the U.S. federal government to stop taxing capital gains on gold and silver bullion:

https://www.bullionstar.us/blogs/bullionstar/stop-taxing-bullion/

The U.S. government and Federal Reserve have created massive inflation by steadily debasing the dollar over the past century or so.

The long-term chart of the U.S. adjusted monetary base, which is one of several widely followed money supply measures, shows how the country’s money supply surged by an astounding 55,440% from 1920 to 2020. (Note that the Federal Reserve stopped publishing this data series in late-2019, which is serious reason for suspicion. Are they trying to hide how much they’ve debased the U.S. dollar? You decide.)



The long-term U.S. Consumer Price Index chart going back to 1800 shows how each progressive assault on the dollar’s integrity caused the cost of living to skyrocket while causing the dollar’s purchasing power to plummet. Most people are unaware that U.S. consumer prices were largely stable for nearly a century until the Federal Reserve was founded in 1913, which let the inflation genie out of the bottle in a tremendous way. Since the Fed was founded, U.S. consumer prices have increased more than thirty-fold! It’s hard to imagine a time when there wasn’t steady and consistent inflation, but that was the reality in the 19th century when money — thanks to its backing by gold and silver — was far sounder than it is today despite our advanced technology and accumulated knowledge.



Since the Fed was founded in 1913, the U.S. dollar has lost nearly 97% of its purchasing power and there is no end in sight, unfortunately:



Another way of visualizing the dollar’s stunning loss of purchasing power is by comparing it to gold, which has been used as money for six thousand years and is the most stable store of value in existence. Over the past century, the U.S. dollar’s purchasing power has plunged by 99.17% relative to gold:



Precious metals help people preserve their wealth because they rise along with the money supply. The chart below shows how gold follows the U.S. M2 money supply higher over the long run:



Silver also follows the money supply higher over time, though it is more volatile than gold and has longer periods of time when it lags or outpaces money supply growth:



Because the U.S. government and Federal Reserve have created massive inflation by steadily debasing the dollar over the past century or so, Americans need a way to protect their wealth from that onslaught. Gold and silver are very effective stores of wealth, but they are taxed at a very high rate by the government that has created the massive inflation in the first place.

We are “being ground between the millstones of taxation and inflation,” to use the words of Vladimir Lenin.

Please read the article for our full argument, including the discussion of a new bill that intends to end federal taxation of gold and silver bullion:

https://www.bullionstar.us/blogs/bullionstar/stop-taxing-bullion/

We'd like to start a discussion about this very important issue. Please leave your questions and comments below!