Introducing: The Pursuit of Happiness


It’s pretty serious to accuse someone of tax dodging.

And it’s even more serious to accuse an entire generation of tax dodging.

But that’s the claim made in a letter to the Reserve Bank of Australia (RBA) by Peter Mair, a former RBA official. According to the Age, Mr Mair wrote:

‘If putting it under the bed or in a cupboard means you qualify for the pensioner card, you get discounted council rates, discounted car registration, discounted phone rental – in percentage terms the return is enormous.’

Mr Mair has written to the RBA suggesting the reason there are so many $100 notes in circulation is because old folks are stashing them under the bed…just so they can claim welfare benefits.

Clearly the government needs to string up these old bludgers. Stealing from the public purse is a terrible crime isn’t it? Or is it?

I’ll give you my take on this in a moment, but first…

The Mainstream Four Years Too Late

No doubt you remember the claim that higher lending standards protected Australian banks from the worst of the global financial meltdown.

This week the mainstream press ‘revealed’ that claim as completely bogus. That’s funny because I wrote about this four years ago. I said Aussie banks were just as guilty of targeting ‘subprime’ borrowers as the US banks.

I can only hope I helped some Money Morning readers avoid ruin. There are some terrible stories of single mothers and pensioners left in financial distress.

But there’s an even bigger scandal happening. Read about the threat to your wealth in We Said This Four Years Ago, But Nobody Would Listen.

The Pursuit of Happiness

Today I want to make something completely clear. If you don’t understand and follow what I’ll explain today, then nothing else matters.

If you don’t get it, and don’t do something about it, then you can forget about reaching your goals and living a happy and comfortable retirement.

Remember, whether you know it or not, your personal goal is to achieve happiness. Most people forget that. Most think their goal is to amass a huge personal wealth…or to lead a healthy lifestyle.

But those are merely the means to achieve the end goal.

That’s why I’ve decided to name the new free weekly eletter the Pursuit of Happiness.

I should be able to give you details next week about how you can subscribe for free to the Pursuit of Happiness.

You may have heard of the phrase, pursuit of happiness. It comes from a document many consider to be one of the world’s most important, the US Declaration of Independence.

Written by Thomas Jefferson, the full quote is as follows:

‘We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

‘That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it…’

That sums up the new free eletter in a nutshell.

Right now, governments the world over are denying citizens life, liberty and happiness. Instead they are abusing their powers in order to stay in power and buy votes.

That’s the theme of today’s Money Weekend…

The fact is at some point you’ll want to stop thinking about building wealth. You’ll just want to sit back and enjoy the fruits of a lifetime of labour.

You’ll just want to keep your money somewhere safe: a bank, a dividend paying stock, a private business…or under the mattress.

But you can only do that after you’ve laid the groundwork. You have to work at building wealth, just as you have to work at keeping healthy.

Only once you’ve done that can you sit back, content that you’ve done all you can to achieve happiness in retirement.

Trouble is the first stage of building your wealth isn’t always as easy as it should be. In fact, thanks to the meddling of government and central banks, building wealth today is as hard as ever.

The meddling has gone so far that for some people, building wealth will be impossible. They’ll never get to lead an independent lifestyle. And worst of all, they’ll never get to achieve happiness in retirement.

And do you know what? That’s just the way the government wants it.

Buying Votes With Your Money

The last thing any government wants is for you to be independent. The government hates the idea that anyone could financially fend for themselves without needing the support of government.

That’s why they go to such lengths to make sure you don’t have more than your ‘fair share’ of money. At any point in time, governments are looking for ways to deprive you of your hard-earned money.

Whether it’s a tax on your income, a tax on saving, a tax on spending, a tax disguised as something else, the end result is the same – more of your money leaving your pocket and heading into government coffers.

Take the latest report about the Aussie government swiping $850 million from Medibank Private. We’ve always said that compulsory private healthcare is just another tax.

And now we’ve got it right again. As the Sydney Morning Herald reports:

‘The federal government is set to pull more than $850 million in dividends from Medibank Private in just three years, forcing the health insurer to tap into its reserves to make the payments.’

How is private healthcare anything more than a tax when you’re forced to pay money for something you don’t need, so the government can siphon the cash into its own coffers?

I guess the message is, if you don’t want to give the government more money than you have to, don’t use Medibank Private.

Because once the money goes into government coffers, what does the government use it for? There’s no other word to use except ‘bribery’. It takes the money from you so it can bribe others.

A report in the Australian Financial Review (AFR) this week shows exactly how this works.

Trade minister and former union chief, Greg Combet is fighting the release of classified government documents. Mr Combet’s argument is that:

‘”There are very sensitive commercial issues in those documents, very sensitive, that would have a very negative effect,” he said. “The confidence in [companies] sharing their commercial information with government would be severely prejudiced and, not only that, it would have investment and employment consequences.”‘

Of course, as the paper rightly points out, the real reason for the secrecy is completely different:

‘It might also help explain if the $34 million Combet gave to Ford this year to design a new Falcon – one of the least-popular cars in production – was intended to push a decision about the fate of the company’s Australian manufacturing operations beyond the next election. Many of the men and women who make the petrol-guzzling car live in Corangamite, the Geelong-based federal electorate that Labor candidate Darren Cheeseman won in 2010 by 771 votes.’

It’s funny isn’t it? The government refuses to tell taxpayers the reasons for spending taxpayer money…because it’s a secret. Yet you, the taxpayer must tell the government everything, including what you do with the money you’ve earned.

If you don’t they’ll accuse you of fraud and send you to jail.

There’s no getting around it, what you’re living through now is a coordinated and criminal attempt by the Australian government to take your private wealth.

Slowly, Slowly Catching Your Money

But as usually happens with government, it isn’t doing it all at once. It’s a gradual theft.

The first stage happened many years ago when the government claimed that superannuation was a way for people to save for retirement. But as I showed you recently, the real reason for superannuation was to increase trade union power over private companies.

The next step happened three years ago when the government revealed it would expropriate the private superannuation funds of temporary foreign workers who had left Australia.

This gave the government an $800 million boost to its bottom line. The government instructed the Australian Taxation Office (ATO) to tax these funds at 100%. The ATO then transferred the money to the federal government’s consolidated revenue…and they spent it.

But that still wasn’t enough. Next the government instructed all superannuation funds to transfer ‘lost’ super accounts to the government twice a year.

If a superannuation fund can’t communicate with a member for whatever reason, it has to hand the cash over to the government…who then spend it.

But that still wasn’t enough either. Next the government decided to increase the compulsory superannuation guarantee to 12%. This is money your employer has to pay into the superannuation system. That means less money into your pay packet.

Even that wasn’t enough for the central planners. This week the government has let slip that it plans to change the tax rules for super. As the Australian reports:

‘The nation’s superannuation industry has been rated among the best in the world at the same time as the Gillard government is warning the $1.4 trillion sector that it will be the target of billions of dollars in budget savings.

‘Industry sources who have been canvassed by Superannuation Minister Bill Shorten for suggestions on potential savings have been told “nothing is off the table” and that government is looking to raise additional “billions” from the sector.’

Notice who the government consults with? That’s right, not you, even though it’s your money. It consults with ‘Industry sources’ instead.

After forcing employers to put money into superannuation the government is now set to tax it more.

On the one hand you get the baloney about the government wanting people to save more, so it increases the compulsory superannuation guarantee. On the other hand the government taxes the very money it forces you to save.

But it’s not just superannuation money the government has its eye on. It’s targeting all wealth. That explains the leaking of the ‘Mair Letter’.

The Government’s Standover Men

Corrupt governments know people won’t voluntarily give money to them. Because they know the government will only waste it on silly pie-in-the-sky plans.

The only way governments can raise cash is by forcibly taking it from private citizens, also known as taxation.

But with any tax system there will always be the temptation to reduce or avoid taxes. Many people seem to think the money they earn, using their own labour, is their own money.

That’s not how governments see it. To them, the money you work for is their money. It’s just your job to earn it so they can take it from you.

Remember, the government doesn’t make its own money, so it has to take it from others. But it’s not a simple process, for any government it’s crucial that it has two things in place to make the transfer of wealth work…

The first is legal tender laws. That’s to ensure that the only acceptable money is government-created money.

The second is a system of laws that allow the government to bully citizens into keeping their money within the system. Because once it’s in the system, the government can monitor it, control it, and most of all take it.

You see evidence of that bullying every year, just before 30 June. That’s when the ATO reveals which occupations and businesses it will target for harassment…or scrutiny as they like to call it.

The targeted industries change each year. But it’s not random. The ATO does this for a specific reason. By scaring individuals and businesses it ensures taxpayers don’t try to claim back more of their tax dollars than the ATO believes they should.

In other words, it creates an accurate record of what individuals claim on their tax returns. In effect this gives the ATO a ‘control’ year for specific occupations and industries (a control is a benchmark used to compare data in statistical analysis).

So that next year, when the ATO isn’t targeting that industry or occupation, it can catch out those who try to beef up their return. The ATO will compare tax returns against the ‘control’ data from the previous year.

If you claim significantly more than others in your occupation claimed in the ‘control’ year, the system will flag you for an audit.

In short, it’s tax bullying. It’s using the threat of jail or fines to get you to comply with the government’s orders. It’s a legalised version of the Mafia’s standover men.

The Biggest Anti-Wealth Law

Then there are legal tender laws. These laws are one of the biggest threats to personal wealth and sound money. Legal tender laws take the control and regulation of money away from the free market and put it into the hands of the government and its central bank.

When you take the regulation of something as important as money and put it into the hands of corrupt and corruptible people, it’s only a matter of time before they abuse that power.

They abuse it by devaluing the legal tender…by printing ever greater amounts so the government can use the printed money to buy votes and line their own pockets.

Does that sound familiar to you?

Look, what I’m describing to you isn’t hypothetical fear-mongering. What I’m describing is stuff that’s going on right now.

Just see how the paper money of the US, UK and Australia has been devalued by more than 90% over the past 40 years.

It’s not a coincidence that in the week when the RBA leaks a letter about old folks stashing cash under the mattress that news breaks of the RBA’s plan to release a new set of legal tender notes.

As the Age reported:

‘The Reserve Bank of Australia has been working on creating new, “youthful”-looking bank notes for the past five years, according to a report.’

‘A bank spokesman has confirmed the project, saying it was taking place to ensure Australia maintained its “relatively low levels of counterfeiting”.’

Don’t worry about ‘youthful’ notes, just give us notes that the RBA won’t devalue over the next 20 years.

But this is more than just refreshing the range of notes. The turnover of note design is significant for other reasons…

When a bank issues new notes these become the legal tender. The central bank will have a grace period where you can continue to use the old notes, but after a period (maybe two or three years) the central bank will remove the legal tender status of the old notes.

That means no-one is obliged to accept the old notes. The only way to cash them in is to take them to a bank or central bank branch.

Of course, once you do that, you’ve put your savings back in the system. The bank will fill out an AUSTRAC form just in case you’re a money launderer or terrorist, and soon enough every government department will know exactly how much cash you have.

That’s the insidious nature of legal tender laws. And that’s exactly why I advise you to legally hold assets outside the system…

A Globally Accepted Store of Wealth

Legal tender laws are exactly why it’s important to own gold. Gold is the ultimate money of freedom. Gold doesn’t have an expiry date. And the government can’t make gold worthless by decree.

Even if the government banned the private ownership of gold (which it legally has the power to do under Part IV of the Banking Act 1959), gold would still have a ‘black market’ value.

Gold retains value based on consumer demand and the knowledge that it’s a globally accepted store of wealth. And you can bet your last dollar that in a situation where the government wants your gold, it’s not because it suddenly has no value.

But the ultimate goal of government and central banks isn’t just to devalue paper money. The ultimate goal is to eliminate all money…except electronic money.

By encouraging and then forcing you to transact electronically, the government can track every last dollar and cent that goes into and out of your bank account (which it does already thanks to the ATO’s software that dials into the Aussie banking system).

Plus it will know where you spend every last dollar and cent and what you buy with it.

Before I go on, let me make one point. Many think gold is an archaic, anti-technology money. It isn’t. Electronic transactions could still take place with a gold standard.

Just as you have ledger entries transferring electronic and paper money from one account to another, so you could transfer gold ownership from one person to another.

But back to my point. The ultimate aim of central banks and governments is to destroy all physical money. This is revealed in the ‘Mair Letter’:

‘Cards and the internet have delivered a body blow to high-denomination bank notes. They are redundant. There is no longer any point in issuing them except to facilitate tax dodging. The authorities would announce that from, say, June 2015 every $100 and $50 note could be redeemed but no new notes would be issued. After June 2017 every note could only be redeemed at an annual discount of 10 per cent. It would mean that after two years, each $100 note could only be redeemed for $80, and so on.’

I don’t know about you, but I’m sick of people lobbying and giving advice to governments and central banks about the best way to rip money from your pocket.

The ‘Mair Letter’ is an insult to every Aussie who makes an effort to save money. And it’s an insult to anyone who carries cash.

Is that a $50 note in your wallet? You must be a tax dodger. Call the police.

The Illegalisation of Money

But that’s the direction governments and central bankers want to take you. They’ve worked hard for the past 100 years to demonise sound money.

They allowed the banks to corrupt the Gold Standard by allowing them to print more money than they could back with gold. They took precious metals out of the money system and replaced it with base metals.

Then they printed more money and allowed banks to lend out 10-times the money they had on deposit. So that today, for every $100 in bank deposits, Aussie banks only have $4 of physical notes and coins to back it up.

If depositors only withdrew 5% of the savings in the banking system in cash in one day, the entire banking system would collapse. That’s why they want to do away with all forms of physical money completely.

If you think I’m mad, take these examples of the demonization of non-electronic money in the US:

‘What Should I Consider Suspicious? People who always pay cash…’ – US Department of Justice and Federal Bureau of Investigation

‘Motorists can be held indefinitely at toll booths if they pay with large denomination bills, according to a federal appeals court ruling…’ –

Or take this from Reuters in 2010, describing new laws for Greece:

‘From 1. Jan 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards.’

And soon enough, the same laws will arrive in Australia.

If everything is electronic, it’s easier for the central banks to print as much money as they want. And because there’s no physical cash, it’s harder for you to see the terrible impact of inflation.

And if you don’t want to use electronic money? Tough luck, that means you’re a terrorist, a tax dodger…or both.

Don’t Trust the Government With Your Money

In short, what’s good for government and central banks is bad for you.

That’s why it’s important that you do what you can to keep your wealth out of the system. And by that, I don’t mean doing anything illegal. I mean you should put at least some of your money in ‘free market’ money.

I’m sure you know what I mean by that. That’s right, I’m talking about buying gold and silver. After everything I’ve written about precious metals, I hope you already own some.

But if not, don’t worry, there’s still time to buy. At first it will seem weird and you’ll watch the gold price every day…cheering as it goes up, and then panicking as it falls.

That’s why I suggest you only buy small amounts to begin with…until you’re used to owning gold and silver. Because once you’ve got the hang of it, you won’t worry about the price going up or down.

By then you’ll know that governments and central banks and the toadying lobbyists are leading the world economy and money system down the drain, so you won’t care about the gold price.

All you’ll know is that however much gold is worth, it will be worth more than any silly bits of ‘youthful’ coloured paper, and certainly worth more than the government-created computer dollars.


From the Archives…

In Defence and Praise of ‘Cranks and Crazies’
21-09-2012 – Kris Sayce

We Buy Gold Because We Don’t Trust Them Not to Meddle
20-09-2012 – Kris Sayce

Why Share Trading is ‘Mental’
19-09-2012 – Murray Dawes

A Bear Market Where You Least Expect
18-09-2012 – Greg Canavan

Questionable Easing 3
17-09-2012 – Dr. Alex Cowie

Introducing: The Pursuit of Happiness