Why Governments Hate Gold
The comments below are an edited and abridged synopsis of an article by Stephen Flood
Governments hate gold because they cannot print it, and it is difficult for them to control. Because of this, gold is of little use to them during the never-ending schemes to tax and redistribute wealth.
India is an example of a government trying to control gold imports through increased taxation on imports and imposing rules; i.e. importers had to re-export 20% of imports as gold jewelry.
These types of rules are difficult to enforce, and smuggling of gold into India skyrocketed. Once gold is in the form of jewelry, it is very difficult to tax.
Some central banks do own gold, which seems counter to Flood’s thesis, but central banks own gold for the same reasons that we own gold—because it is not the liability of another government.
Flood outlines the seven reasons governments hate gold.
“The gold standard forced the practice of austerity. When the government abandoned the gold standard, it gained the power to finance any national expense by simply borrowing from the Federal Reserve.”
“Today, no amount of gold is necessary for the Fed to purchase treasury bonds. It is blessed with the ability to expand their balance sheet with zero limitations.”
“Simply put, gold limits the power and influence of central bankers. No wonder they hate it.”