Why most people buy PMs for the wrong reasons...

But do you not just feel as though the beginning of the end, in quasi-violent fashion (speaking of violent change) of low marginal tax rates for high earners, begun in earnest in 1981, is rapidly approaching? I do, I feel it keenly.

 

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I almost don't recognize the term. Actually, my training is almost exclusively in the public policy / economy-wide branch; so much so that I can barely stay awake reading about economics of the firm.

 

What's your point?
The Federal income tax has 7 brackets: 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%. The amount of tax you owe depends on your income level and filing status. And especially how you operate as an individual with a single job, or an individual with multiple earning streams.

I leverage as much of my cash as possible into protected retirement savings, long term appreciable investments/bonds, and lately into PMs and much higher return graded risk P2P/B loans.

The "violent" aspect of it is correlated to one's interpretation and following of current political agendas, or just increased issues with Police news coverage of which the violence seems to be politically correlated. You should listen to a police scanner of Detroit sometime. Most of that stuff never makes the news.

I've been in all brackets except the top 2. I can tell you, one can certainly find more loopholes and deductions as you make more especially if it's not from one type of income stream. Thus the actual tax rate can be greatly reduced.

If you have one job only and are in the highest tax bracket then you get the high rate. If you have multiple incomes and don't actually keep yourself as the owner you can leverage that greatly.

Losing money in a business or venture is a good thing as long as you are a consultant to that business/venture instead of one of it's principals. Many methods to lower that upper echelon tax bracket.

 

law & economics / business economics here.
of course with so much international commerce the public policy side of it greatly affects the strategy of global/international operations.

Makes PMs seem like a safe haven

 

I'll just point out that the first 40 years OFF a gold standard, 1933-1973, ALSO combined the most rapid growth, in percentage terms, in real personal income AND wealth AS WELL AS top marginal federal income tax rates that topped off at 91%. With that, and the near-zero growth of the same (actually might be net negative) during this century so far, I'm left wondering about the virtue of even a 39.6% rate. What about 60%? What about JFK's "tax cut" to 70%? Then combine that with a 15% or 12% C corp rate.

A high corporate rate with silly low personal rates creates both the incentive to obscenely pay top executives and the parking of funds overseas. Seems like bad policy.

Conversely, a low corp rate and a high "ultra high earner" rate encourages keeping more retained earnings domestic and use them to fuel actual growth or even (gasp!) hiring or dividends.

 

True.
The high Corp tax rates compared to the rest of the world is an incentive to park monies outside of the US. Which is exactly what they are doing. That plus the ability to incorporate and move your HQ outside of the US to places like the Bahamas further erodes the tax base. All in the name of improved returns for stock holders.

Executive pay is another problem but I don't see the direct related high correlation to corporate and personal rates. They are still part of the overhead calculation on business financial sheets. Years ago they were paid insanely which required a change. Now they are paid mostly by improving a companies bottom line with an insane flat pay, but WITHOUT the checks and balances to review *how* it was grown .. see Valeant Pharma as an example of a pay incentive gone wrong. Now to further pad executives pay they get non-cash stock options, etc. which further fattens their pay like the Yahoo exec who is getting the golden parachute to get booted as she couldn't right a sinking ship but got paid a ton.

I see many execs always getting good raises whereas the further you go down the less and less there is. Self serving ....

I do like what is happening at Wells Fargo though ...

Correction would require more federal oversight, which would go against ppl not wanting fatter gov't. Plus they always figure out a way around the system.

The best one can hope for is for themselves to watch their own pocket.
Save their money for the future and ignore the Enron executiv-ish statements to buy buy buy/spend spend spend.

As long as one remembers people are greedy no matter the level, then one can understand the answers to questions when things go wrong.

btw, was going off the gold standard the only stimulus that affected the economy in 1933 onwards? Or more importantly how would it be affected in a global economy?

rats .. silver is up a bit.

btw, every time I see "fiat" .. I think of the car company first.
and yes, I know, most think the break with gold really helped get out of the depression. Of course this was a time when the gold standard limited gov't tools to assist the economy. And the "economy" was much more like a single market economy.

 

Well, part of your answer is a chart that tracked per capita GDP in many countries and a "nugget" was put on each line to indicate when a particular country went OFF the gold standard. Guess what. Every single country flourished when they went off the gold standard. Those who waited longest, languished in depression longer. The earlier they went off gold, the less they felt the Great Depression.

 

If any financial institution is allowed to become "too big to fail", then they also are "too big to not have Uncle Sam so close he knows what you're thinking before you do".

 

Yup, they certainly did.
But many also went off the Gold standard due to WWI (which of course didn't help the gold standard maintain stability) in order to print money to pay for the war. And later on couldn't go back, for shortness, creating inequaties in price of goods globally .. geez .. sounding like a history book. Anyways, it was a good thing to go off the gold standard as it allowed them to use multiple tools to correct economic behavior which allowed the economy to grow.

Of course, now Europe has the Euro as the fixed standard ... it's done wonders for Greece ?

anyways, silver is rebounding.

 

It's Friday. NO country that wants to keep a full sovereignty over its economic lifestyle can last long in any union of currencies, metallic or paper. I refer, as I assume you also do, to the demise of the Latin Currency Equivalence of 1865-1914.

 

Great exchange from you two. Lots of new information ideas to ponder on my end.

 

I do consider myself an equal opportunity pain in the backside to BOTH contemporary American political orthodoxies. I believe they BOTH lie their backsides off, and the way you can tell they're lying is that they speak. It's all about getting the "base" riled up, even when they are just talking pure garbage nonsense. They're both nuts.

 

If I have to pay the electric bill today and have some ASE's, I can take a dozen of them down to (one of many) dealers who'll pay me for them in cash. Then I can go to the nearest grocery store and pay my bill.
Nobody asks what I paid for them. Nobody asks what I did with the money. Nobody pays any attention at all. And my lights stay on.
Try doing that with five shares of Microsoft stock.

 

On the longer view, shares of Microsoft stock will pay you a quarterly dividend that you can take in cash or reinvest in more shares. Ask physical PMs to do that for you.

Truly, though, the two types of investments are totally different and most comparisons will be the apples & oranges type.

 

When the US stopped issuing bearer's bonds, and prohibited other entities from doing so, the concept of investing changed.
It's now a spectator sport. Yet some players still prefer not being watched. Easily liquidated precious metal holdings are one option.

 

I don't for a minute doubt what you write here, @Small Size, truly I don't. But where I live, there is absolutely no such thing as "easily liquidated precious metal holdings". You get get WAAAY under current value when selling, and pay WAAAAY over it when buying. On the contrary, I can place a sell order on a stock, and the money is in my cash account in 2 minutes, with a WAAAAY smaller "vig" or "commission". Places are far more different than you imagine.

 

Seems that placing a small % of a portfolio into PM holdings is fairly standard strategy. There is nothing moronic or foolish about it, despite what the great V. says.

 

Yes, we realize that the government in the last 200 years has gained the power to move with impunity above the law. We see the news every day with Yellen trying to "make" the odds in the "free market" economy.

We also see all of the collusion behind the scenes to make sure it happens. Tainted reports of jobs creation, tainted reports of payroll and poverty numbers. We see the indoctrination of sheep in the educational system.

It's easy to win when you write the rules as you go.

 

^^ This. The fact that this clown is on here patting his own back (again and again) and telling us how stupid we are, only reaffirms that I'm on the right track.

 

Hey Brett.

IMHO, you're giving him far too much credit. He won, according to HIM. His view of reality is far different than most of the rest of the world. As a matter of fact, I'm certain he'll take the preceding sentence as a compliment.

Peace, brother. Back to my coins and moronic friends.