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Open original source ↗The next question is who the buyers are.
The politicians proposing unrealized capital gains taxes will essentially force Western shareholders to sell their assets to the deepest pockets on the planet.
And those aren’t necessarily Western governments anymore, which are (after all) imposing these kinds of taxes partly because they are in the throes of sovereign debt crisis.
Instead, with gold mooning, there’s a scenario where non-Western sovereign wealth funds will likely be able to buy up Western assets with hard currency.
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This is even incredibly dumb to do in war time. Imagine instead of stocks you owned egg laying chickens. The value of the chickens went up and now you have to sell your chickens to cover the unrealized gains. After selling the chickens you now have fewer chickens left. That means fewer eggs laid in the future. This is literally destroying the means of production. They will basically have to add capital controls. Dutch business owners would have to sell a part of their equity to someone and tell that investor that they are not using the raised proceeds to grow the business, but instead to pay for the tax. Bonkers, it’s like they want Russia to win.
toly ↗