In a recent episode of the "Money Medals Midweek Memo," host Mike Maharrey offered an in-depth look at tax day experiences, precious metals markets, and broader economic issues.
Mike began by sharing a personal anecdote about the burden of writing a significant check to the IRS on tax day, reflecting on Mark Cuban's assertion that paying taxes, next to serving in the military, is the most patriotic act a citizen can perform. While Cuban reportedly paid around $275,000,000 in taxes, Mike pointed out that this amount is relatively small given Cuban's net worth of approximately $5.4 billion.
Mike then critiqued the public's perception of tax refunds as a boon, suggesting it masks the true impact of taxation, especially for self-employed individuals like himself. He argued that the withholding system desensitizes people to the amount of tax they actually pay and posited that a broader understanding might trigger a tax revolt.
Mike Maharrey referred to the U.S. government's borrowing practices as akin to a Ponzi scheme. He explained that the government funds itself not only through taxation and borrowing via the sale of Treasury bonds but also by continually needing to find new borrowers to pay off old ones when those bonds mature.
He described this cycle—where the government borrows new money to pay back previous loans—as a hallmark of a Ponzi scheme, emphasizing its unsustainable nature. This discussion highlighted his concerns about the fiscal practices of the government, particularly in the context of its increasing debt and spending.
The conversation shifted to the precious metals market where Mike noted a significant selloff in gold and silver, highlighting recent market fluctuations. For instance, gold dropped nearly $80 from its daily high on a particular Friday, despite having surged over $2,400 an ounce earlier in the day.
Silver also saw dramatic swings, with prices initially climbing toward $30 per ounce before plummeting below $28. Mike discussed the influence of geopolitical tensions and market dynamics on these movements and reinforced the value of gold and silver as inflation hedges.
Maharrey discussed geopolitical tensions related to Iran and Israel as factors influencing the precious metals market, specifically gold and silver prices. He mentioned that speculation about Iran attacking Israel had initially driven Safe Haven buying, contributing to the rise in precious metals prices.
He described a scenario where Iran was seen to "flex" by launching missiles and drones, which mostly did not hit their targets. This tension heightened fears of a broader conflict in the Middle East, affecting market sentiments and driving the initial rise in precious metals prices as investors sought safe assets amid the uncertainty.
Delving deeper into the silver market, Mike argued that recent manipulations suggest a bullish future for the metal. He cited industry experts who believe the physical silver market may soon overpower the paper market, potentially leading to price corrections that favor physical silver due to supply constraints and market demands.
Returning to taxation, Mike introduced the concept of an "inflation tax," which he described as a stealth tax affecting everyone, irrespective of their tax bracket. This form of inflation, which is called monetary inflation, erodes purchasing power and acts as a continuous tax, making everyday life more expensive.
He cited recent Consumer Price Index (CPI) data to illustrate his point: the annual CPI for March was reported at 3.5%, up from February's 3.2% and above the expected 3.4%. This, along with core CPI figures, underscored an ongoing underestimation of inflation's true impact.
In conclusion, Mike encouraged listeners to consider investing in precious metals through Money Metals Exchange as a prudent hedge against inflation. Purchasing gold and silver is a proactive measure to safeguard against economic volatility.
Overall, the episode offered a comprehensive outlook on tax strategies, monetary policy implications, and investment advice amidst current economic uncertainties, emphasizing the need for awareness and proactive financial planning.
Money Metals Exchange and its staff do not act as personal investment advisors for any specific individual. Nor do we advocate the purchase or sale of any regulated security listed on any exchange for any specific individual. Readers and customers should be aware that, although our track record is excellent, investment markets have inherent risks and there can be no guarantee of future profits. Likewise, our past performance does not assure the same future. You are responsible for your investment decisions, and they should be made in consultation with your own advisors. By purchasing through Money Metals, you understand our company not responsible for any losses caused by your investment decisions, nor do we have any claim to any market gains you may enjoy. This Website is provided “as is,” and Money Metals disclaims all warranties (express or implied) and any and all responsibility or liability for the accuracy, legality, reliability, or availability of any content on the Website.
Recommended Content
Editors’ Picks
EUR/USD retreats toward 1.0850 despite weak US employment data
EUR/USD loses its traction and declines toward 1.0850 after testing 1.0900 earlier in the session. Because Nonfarm Payrolls data for October missed the market expectation by a wide margin due to hurricanes and strikes, the US Dollar manages to hold its ground.
GBP/USD climbs above 1.2950, looks to end week little changed
GBP/USD benefits from the improving risk mood and trades in positive territory above 1.2950 in the American session on Friday as markets ignore the weak labor market data from the US. The pair remains on track to end the week flat.
Gold clings to small gains near $2,750 after US data
Gold clings to marginal recovery gains and trades slightly above $2,750. The 10-year US Treasury bond yield struggles to push higher after the dismal October jobs report and weaker-than-expected PMI data from the US, helping XAU/USD keep it footing.
Bitcoin Weekly Forecast: Run toward fresh all-time high hinges on US presidential election results
Bitcoin could experience a price pullback in the next few days ahead of the US presidential election, analysts say, an event that will be key to determining whether and how the crypto class will be regulated in the years to come.
Bank of Japan holds rates steady amid signs of modest GDP growth
Monthly industrial production results have been mixed but generally indicate a modest recovery in third-quarter GDP. Clear guidance from the Bank of Japan remains elusive, with each upcoming meeting being pivotal.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.