10A039 A Golden Fleecing by Jim Davies, 10/8/2010

According to dictionary.com, the verb means "to deprive of money or belongings by fraud, hoax or the like; swindle" and so serves well to describe the everyday work of the IRS. The noun, a "fleece," is the coat of a sheep or similar animal, so literally a fleecing is the removal of that protective woolly layer. There is evidence that in ancient times one way to pan for gold was to spread a fleece across the path of the stream so that flecks of the metal would adhere to the woollen strands, and if that's so it may be the source of the legend of Jason, who became king (of where or whom, I'm not too clear) if he could capture a certain golden fleece. He did, and so he and his argonauts lived happily ever after.

In a related fairy tale, when some lawyers and politicians set up the "United States of America" they solemnly wrote that no state should make money out of anything but gold and silver, and gave themselves the power to "coin" it. Not an exclusive power, just one among many as a public service. Bring your nuggets and powder, we'll coin it for you. Nobody has ever yet coined a piece of paper, so we can be certain that paper is not lawful money.

Paper can be printed however, very cheaply, and so is a money form much preferred in government circles; and the transition from gold to paper was achieved in stages between 1913 and 1972. It's now a fait accompli; and paper money has lost 98% of its purchasing power since 1913 as a result. One key moment in this transition happened in 1933/4, when FDR commanded that all gold coins be surrendered to his officers, who swarmed around providing bits of paper in exchange. The exchange rate was of $20.67 an ounce; within a year it was decreed to change to $35, so fleecing those former gold-owners of 41% of their savings in a few months. Yesterday gold exchanged at $1,350 per ounce, so since 1934 the fleecing rate has risen to 98.4%.

However, government people are not yet satisfied, in their quest to impoverish Americans. This year a new law provides that anyone owning gold coins (which is now legal again) must pay tax on any "gain" in their value. (More accurately, the law makes it harder to avoid not doing so.) Notice how these people use the word "gain." If a prudent but law-scoffing 1934 saver had forgotten to hand in a gold ounce to FDR, by now in his needy old age he would have enjoyed a value "gain" of (1,350 - 20.67 = ) $1,329.33. If he is to pay tax on it at, say, 30% that means he'll part with $389.80, or 19 times what the coin was originally worth.

There's no true and actual gain at all, of course; gold maintains its purchasing power rather steadily, over long periods. This just proves that Jason had simply no idea; governments of the new millennium have turned fleecing into a fine art. But he did demonstrate one thing: he who steals the fleece, rules the world.

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