Precious Metals and the Fraud of ‘Capital Gains’

by Jeff Nielson, Sprott Money

January 16th, 2015

There are many ways in which our corrupt governments, and the Corporate media (which acts as their parrot) seek to undermine and persecute those who acquire and hold precious metals. Two of their most-loathsome habits concern precious metals and taxation.

The Corporate media regularly lies about how the principles of taxation apply to precious metals. This is generally for the purpose of frightening people away from gold and silver. Our governments regularly assess illegal taxes against gold and silver, as this is an indirect means of stealing our gold and silver.

When it comes to the taxation concept known as “capital gains”; we see both: lots of lying and illegal taxation. The basis of all this lying and illegality is simple: there has not been any “capital gains” for the holders of gold and silver, ever, even when nominal prices were rising, because there cannot be any capital gains.

Gold (and silver) is “capital” – i.e. money. Thus, as a medium of currency, it is impossible for a 1-oz gold or silver coin to experience a capital gain, because no matter how long you hold one of these 1-oz units of money, it remains a 1-oz unit of money. We can demonstrate this principle in empirical/historical terms.

Two thousand years ago, in ancient Rome; a holder of a 1-oz gold coin could use that coin to purchase the “fine clothing” of that era: a quality toga, along with the customary accessories – a leather belt and sandals. Two thousand years later; a 1-oz gold coin still has the purchasing-power to buy a fine suit of clothing and accessories. However, with the price of gold temporarily/illegally suppressed; one would have to buy that suit “off the rack”.

Where is the supposed capital gain? Over a period of two thousand years; there has been no increase in purchasing power for our (gold and silver) money. Therefore any claims (by government or media) that precious metals holders have experienced “capital gains” over some period of mere months/years is obviously fraudulent.

What does it mean when the nominal price of gold and/or silver increases, as expressed in our debauched paper currencies? Does it mean that our gold and silver has increased in value (i.e. purchasing power)? No, it means precisely the opposite. It is the paper currencies which relentlessly lose value/purchasing power. Our 1-oz gold/silver units of money have remained exactly the same.

Again, this is something which we can prove empirically. We have already established that gold (being perfect money) never loses value, at least not over the two thousand years of empirical data we have at our disposal. We know implicitly that the same is true is silver. Prior to the last century of ruthless manipulation of silver prices; for thousands of years the gold/silver price ratio had remained fixed at a ratio of (roughly) 15:1.

If gold has not lost any value in two thousand years, and silver did not lose any value versus gold over that time (until the modern era of market manipulation), then silver could not have lost any of its value/purchasing power either – over 1,900 of those 2,000 years. Both are perfect money.


Then we have the bankers’ laughable paper currencies. It is common knowledge that in the mere, 100-year history of the Federal Reserve (where it was legally responsible for “preserving the value of the dollar”); the U.S. dollar has officially lost roughly 99% of its purchasing power. Unofficially; the dollar is already totally worthless – having been hyperinflated by the Federal Reserve following the Crash of ’08.

This comes as no surprise to us. In the approximately 1,000 years since bankers first began experimenting with this “funny money”; their paper currencies always go to zero – except when they are yanked out of circulation before that can happen.

The bankers’ paper currencies always go to zero, and generally in relatively rapid terms (in comparison to real money). Gold and silver – being hard assets, and real money – can never go to zero, and, empirically, we have two thousand years of evidence that they never lose (or gain) value, either.

When some drone of the Corporate media, or the Tax Man of our (corrupt) governments claims that our gold or silver (which never changes in value) has made a “capital gain’ versus paper currencies which always/rapidly lose their value; what is the only rational, legal conclusion which could be reached by any honest entity?

Clearly, all facts and logic (and law) support the conclusion that our precious metals have not (and do not) experience “capital gains”. Rather (and opposite to this legal fiction); it is the debauched paper currencies of the bankers which relentlessly lose their value, and thus suffer (literal) “capital losses”.

Yet try to claim a “capital loss” in your tax return, based on the all the loss-in-value which we all lose (every year) on any/all paper instruments denominated in the bankers’ worthless currencies, and see what happens. Our corrupt governments (and the corrupt courts which act as their tools) will deny the existence of such “capital losses”, despite the conclusive empirical evidence which establishes this point.

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