Gold is beginning to become less efficient as a global safe haven asset.
On November 22, a man in Normandy, France discovered 100 kilograms of gold worth US$3.7 million in a house inherited from its previous owners.
Nicolas Fierfort, auctioneer at the Evereux mansion de ventes, stated that over 5,000 gold pieces were hidden under furnitures, which were legally obtained and acquired in the 1950s and 1960s.
“There were 5,000 gold pieces, two 12-kilo gold bars and 37 ingots each weighing one kilo,” said Fierfort. “It was extremely well hidden – under furniture, under piles of linen, in the bathroom. Basically, it was stashed everywhere.”
The auctioneer noted that the stash of gold hidden in the inherited house was purposely left for the new owner to obtain. Gold bars and ingots were carefully placed within objects like whisky bottle boxes and chairs, for the new owner to discover and monetize.
However, the new homeowner was immediately questioned and brought in by the tax regulators and authorities in France, who demanded the man to pay 45% in inheritance tax. He was also told that by French regulations, he would be required by law to pay wealth tax if the previous owners failed to do so in their last three years of life.
The previous homeowners left stacks of gold for their heir to receive the family’s wealth. Gold, which was arguably the only safe haven asset during the 1950s, was the sole stable store of value for a wealthy family like the owners of the Evreux mansion to acquire.
As technology advances and the global market trends evolve, more valuable, stable and reliable stores of value emerge. Cryptocurrencies like bitcoin, which are decentralized, are arguably the most viable asset for inheritance and long term investment as authorities and governments cannot forcefully tax, seize or control them.
Edward Snowden, former CIA contractor, whistleblower and advocate for privacy, stated that new technologies raise the possibility for “unstoppable tax protests.” On social media, Snowden mentioned Zcash as an alternative cryptocurrency to evade taxes and escape tight regulatory frameworks established by the government.
But, Zooko Wilcox, emphasized that while cryptocurrencies like bitcoin, Etheruem and Zcash can be used to avoid and evade taxes, he believes these technologies will not be primarily used for tax evasion.
“Zcash’s ‘Selective Disclosure’ makes it possible for businesses to conceal their private transaction details from competitors, thieves and foreign enemies, while simultaneously disclosing that information to their country’s tax authority,” said Zooko.
Image from Shutterstock.
Last modified: May 21, 2020 10:11 AM UTC