Gold was down (at press time) $48.60 (-2.9%) for the week to $1,648.80, and silver was down $2.59 (-7.9%) to $30. Has the 12-year-long bull market in gold ended? Byron King doesn’t think so. He tells the Gold Report December 19, “Much of the recent gold exit has been a reaction to the impending [US] tax changes on January 1, when tax rates will go up unless there is Congressional action. I don’t think very many investors are selling physical gold or silver. I do think people are selling paper and electronic gold to lock in gains and pay capital gains at the lower 2012 tax rate.”
He concludes, “It is tax-driven selling, not a reflection that the world’s monetary or economic system is getting well.” It is the great virtue of King’s assessment that we shall know in less than two weeks whether he is right.
At Seeking Alpha December 16, Tim Iacono notes that QE4, “the central bank’s fourth round of quantitative easing, failed to spur a rally in precious-metals markets.” Even so, “All of the fundamental drivers for a continuation of the secular bull market in gold and silver are still in place, namely, negative real interest rates for years to come, fading confidence in the current monetary system and strong demand from both emerging market central banks and investors around the world.”
Gold’s rise from $273 in 2000 was a revolt against the New World Economic Order (AKA “there is no alternative”): perpetual ZIRP, the “abolition” of the business cycle and ever-larger government and public debt, with their concomitant debasement of currencies. Gold is the choice of those who don’t need a weatherman (or central banker) to know which way the wind blows.
All governments proclaim that “choice” is the highest virtue, but it’s a hollow choice they offer, the same one offered by Henry Ford to buyers of his Model T: “Any customer can have a car painted any color that he wants, so long as it is black.” For all its talk of “diversity,” our liberal elite reacts to open disagreement with calumny and threats of retribution.
So silence is the default choice of today’s dissidents, lest they be subjected to what Orwell called the “two-minute hate” but which is actually closer to what the Romans called proscription. Not so actor Gérard Depardieu, Auguries’ Man of the Year. No long willing to suffer France’s seizure of 85% of his income, Depardieu has chosen voluntary banishment to a new home in lower-taxed Belgium, 800 yards from the border.
In response, Prime Minister Jean-Marc Ayrault called him “a pathetic loser.” He thundered, “Those who are seeking exile abroad are not those who are scared of becoming poor…. We cannot fight poverty if those with the most, and sometimes with a lot, do not show solidarity and a bit of generosity.”
The left-wing daily Libération reviled Depardieu as a “drunken, obese petit-bourgeois reactionary,” while the establishment daily Le Monde sneered, “Bravo l’artiste!”
Depardieu was not cowed. His apologia was published by Le Journal du Dimanche, “You say ‘pathetic’? It is pathetic…. I started working at the age of 14 as a printer, then as a warehouseman and as a dramatic artist. I always paid my taxes regardless of the rate under all governments…. I do not ask for approval; I could at least be respected.
“I give you my passport and Social Security, which I’ve never used. We are no longer the same country. I’m a true European, a citizen of the world…. I paid €145 million tax in 45 years. I have 80 people working in companies that were created for them and which are managed by them. I will not complain or brag, but I refuse the word ‘pathetic.’
“Who are you to judge me, M Ayrault, M Hollande? I ask you; who are you? Despite my excesses, my appetite and my love life, I am a free being, sir; and I’ll be polite.” Governments are never polite, even as they deign to leave you with 15% of what you earn.
At ZeroHedge December 16, Emmanuel Martin of the Institute for Economic Studies-Europe makes the curious argument that Depardieu “is effectively saying that thanks to globalization we are free to escape a government’s crushing fist. Institutional competition and especially tax competition is an essential feature of our liberty: it is crucial that people can ‘vote with their feet.’”
But it is precisely the goal of globalization to ensure escape is not possible: one world, one people, one law. How much freer the world would be were all the leviathans, all the empires that pass for countries, were broken up. Small is beautiful and especially in polities.
It is tempting to compare Depardieu to the indefatigable farmer he portrayed so memorably in Jean de Florette. But Florette tried to beat a rigged game and lost everything; Depardieu won’t make that mistake.