@AvidCommentator Yes it’s a factor, but what about Australia’s abnormal post covid growth in money supply, credit and unprecedented low interest rates that fueled asset price inflation like throwing gas on a fire, then throw some abnormal migration levels in to keep the party going!
@PolemicTMM@dylangrice Has there ever been a legal case to challenge a government on this? Capital gains tax on gold vs fiat would be an interesting analysis!
Capital gains tax on hard assets is a tax on inflation.
The dirty little secret is that inflation is good for the government.
Inflation + Nominal Taxation-
Capital gains tax is charged on nominal gains, not real gains.
If inflation is 5% and your asset just keeps pace with inflation, your purchasing power is unchanged—but the tax system records a “gain” and takes a slice.
The state effectively confiscates a fraction of inflation, compounding over time.
Hidden Wealth Transfer Mechanism -
Individuals lose real wealth, while the state gains real resources.
It’s similar to “financial repression” via negative real rates, but more politically invisible because most people don’t trace it through.
Government Incentives-
In theory, governments have an incentive to allow inflation because it:
Erodes the real value of outstanding debt.
Increases nominal tax receipts without raising rates (bracket creep, VAT take, CGT on inflationary “gains”).
To the ~10% of you watching the entire 90 minute chat between @DFA_Analyst and I in one sitting, covering everything from the size of Australian government spending to Kiwi housing prices.
I salute you, your viewership is immensely appreciated 🙏
https://t.co/S03nVfaYJH
The Greatest Speeches on Gold: Part 1
Human Freedom Rests on Gold Redeemable Money
Warren Buffett is possibly the greatest investor of all time. But did you know that his father, Howard Buffett, a congressman from Nebraska, gave one of the greatest speeches about gold in history?
In 1948, just after WW2, he argued that the gold standard is essential to human freedom; he said that paper money, or fiat money, allows politicians to inflate the currency, leading to economic instability and, ultimately, a loss of individual liberty. Under a fiat money system, citizens have no control over the value of their money, leaving them at the mercy of government spending decisions.
He warned that failing to restore sound money could lead to widespread inflation, economic chaos, and potential social unrest.
"Before 1933, whenever the people became disturbed over Federal spending, they could go to the banks, redeem their paper currency in gold, and wait for common sense to return to Washington."
"Our finances will never be brought into order until Congress is compelled to do so. Making our money redeemable in gold will create this compulsion."
He ended with a call to action:
"Unless you are willing to surrender your children and your country to galloping inflation, war and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money."
What do you think? Was he correct or not?
@TheKouk Interested in what your view was when interest rates were abnormally suppressed fueling excessive debt levels and over inflation of asset prices? We are now paying the price in trying to normalize. There has to be a real cost of capital for an efficient market
@theprojecttv@GrogsGamut Interest rates are not the root cause here, how about discussing the excessive debt levels and overinflated asset prices caused through earlier policy mismanagement.
@ttmygh Don’t disagree however people seem to have also lost personal accountability for responsible financial decisions! Borrowing excessive amounts of money at record low rates for obscene and abnormally overpriced property…what could go wrong!