Where is the US economy headed?

Okay, they're used in high tech devices. How much gold's intrinsic value is required for all the gold in China for use in high tech devices? It seems to me that high tech device cost to consumers have been going down, not up, while the cost of gold has been increasing. Why, if gold has such intrinsic value?

And you believe your gold is readily acceptable as payment for anything you need to buy vs your credit card? How much change do you think you'll get in gold or currency with gold as your currency for trade?

For portability, I would prefer a cashier's check. For anonymity I would take diamonds.

You can turn gold into cash, anonymously, almost anywhere in any country and in less than a couple hours' notice.

Cycloptichorn

Has anyone heard any analysis of what the Japanese situation means for the global economy? Not only with the calamity effect production but now also a lot of money that was in international debt will now go to rebuilding, and we also now need to take more seriously the political paralysis that exists in Japan as they might not be able to overcome their current challenges. We also need to consider that Japan will likely now no longer have much of an appetite for challenging the rise of China.

Thoughts??

Is that so? And who exactly is buying, and at what price?

One more thing; how many who has investment in gold actually have gold in their possession?

Serious? Gold purveyors. I have a guy in Oakland who does nothing but guy and gold for a living. I've done business with him several times - I have a long habit of buying a gold coin with every paycheck.

You can look 'em up in the phone book, they're everywhere. They pay depending on the purity and the quality of the gold, so I can't say exactly what price it is at.

Cycloptichorn

You have revealed your bias for gold; you're a trader, and I'm not. The only time I've recommended gold investment is in 2008.

With all your trades in gold, how much profit have you made, and what were the tax consequences?

We have some gold coins, but they were not meant to be an "investment." Some were given to me by my best friend who is now gone from this world, but I did purchase some gold coins for my sons - not as an "investment" many years ago. I would not pay the current market prices for gold.

Current info on taxes on selling of gold .

Lol, I'm not arguing in favor of gold as a great investment, man. I dabble a little bit in it for fun, but not because I'm looking to make a comparable return to what you could do in the stock market.

I was just pointing out that part of the reason it's so high is that it has an intrinsic value as a substance, both decorate and from an engineering standpoint. And it's sufficiently rare as to prevent it from becoming worthless in the long run.

As for profit, if you bought today, you wouldn't make much. But the several ounces that I purchased in 2000 and 2001 are now worth 5 to 6 times the value I paid for them. That's not exactly a terrible rate of return.

Cycloptichorn

Well, from an engineering standpoint, why has the retail price of high tech products continued to drop as gold prices increased? Where's the so-called "intrinsic value" you're talking about?

The article re Illinois vs Amazon estimated that states in total don't collect $20BN a year in sales tax from untaxed sales made over the internet (not just via Amazon). I can't verify that number.
Yes, I am a brick & mortar store competing with on-line sales. I realize that, unless we can redefine how we do business, we will probably disappear by the end of the decade after almost 50 years. So it goes.* No problem for me, as it turns out that my flagship store in Cville sits on a prime piece of real estate that will sell for an obscene amount of money.
But, this thing about sales tax grates with me:
> States and municipalities are desperate for revenue and this potential source of revenue is blocked (see more about that below);
> I start out at a 5% price disadvantage because of the sales tax. Is that a factor in how people shop? My employees say no; core price, convenience, and quick and free shipping on gizmos they buy online. But at least a couple of times a month we get requests for a quote on a relatively large sale. We work up a price and the customer will say, with a wink, "Can you ring it in as non-taxable?" I am proud that my employees-even the purple haired goths-
respond with a variation on "I don't get paid to break the law."
> Virginia has a Sales and Use Tax. Individuals are supposed to report internet purchase sales and pay the 5% on their tax return. The compliance rate is probably close to zero.
> I think that, but I am not sure, that when you itemize your deductions on your federal return, there is a table you can use to estimate sales taxes. Sales taxes you didn't pay. I may be wrong about that. Is that true?

Thanks for responding about this, Irishk. I realize we have moved on to other issues so this may be irrelevant, but I know you to be interested in stuff like this. I think that the issue will not go through Congress, but rather through the courts, again, regarding "nexus."

*Rant: People want me to hire their kid for the summer or contribute to silent auctions for some cause but when I ask them if they shop in my stores, they respond "Oh, no. I buy stuff online but I am sure other people do shop here."

Sorry for my long response to Irishk.

rjb, No problem. We need to hear all sides of this issue to learn the pros and cons from both ends of this debate. Unfortunately, fed and state laws differ, and people will go for the lower price as purchasing power disappears from the middle class.

The feds fail in many areas of our economy, and their support of wall street over main street has made it difficult for the typical middle class consumer to not look for bargains.

The middle class is being squeezed more and more as food and fuel prices go even higher.

These inequities will continue as long as the feds ignores these problems.

I think you have a very good point. California is, among other things very aggressive about collecting taxes of all kinds. The basic state sales tax here is about 8.5% and county & city supplements raise the total as high as 10% in some places. A 10% price advantage is indeed a powerful incentive.

The current struggle between Amazon and the several states after it is an illustration of the seriousness of the problem, at least from the perspectives of these actors. Mant market segments, ranging from books & music to clothing and eloctronics are increasingly in the hands of on line distributors. For them at least this is a serious issue.

There are two dimensions to this problem;(1) the on line distributors themselves; and (2) the increasing levels of the sales tax. It wasn't that long ago that sales taxes generally were well below 5%.

I believe that all states, with the exception of the five that have no sales tax, are required to report the tax owed on their Net purchases (use-tax) if the seller doesn't collect the money. And yes, it's right there on your income tax form, but I agree with you that it's most likely ignored by most. I've always thought I'd be nervous not reporting it on a particularly large purchase, as that might flag a return for an audit. I have nothing on which to base that worry, other than a general paranoia of the IRS and its considerable power. If I lived in a state with sales tax, though, you can be sure I'd report the use-tax on large Net purchases just for peace of mind.

I can see it heading back to the Court especially as the last decision was almost two decades ago when online stores weren't even all that prevalent. I think they might want to see it tackled in Congress first, though. Either way, it's going to get very messy.

I remember buying something in another county of California, and the state asked me to pay the higher sales tax of our county. That was some years ago, but I'm sure they can also do that with other sales.

What is also interesting is that US customs now allows each traveler to foreign countries $800 of tax free purchases that used to be $400. The feds must have lost a pretty bundle by increasing the base at a time when they continue to increase their deficit.

Taxation is a conglomeration of different taxes imposed by the feds and state. It's really silly if one thinks about it; they should make taxation simple, but I don't see that happening during my lifetime.

Good points. Shoppers living in Chicago can head to suburbs with lower sales tax rates and if they pay cash they're good to go.

I recently bought software from a company in Europe. If I lived in your state, would I have to calculate my use-tax liability and report it?

It's all so complicated lol. Makes my head hurt.

Any purchase in Europe is tax free up to $800 when you pass US customs. That's another point of issue; if you arrive in NYC vs California, you probably still pay the same US tax rate. No state sales tax is involved.

Some internet purchases are from out of the country. I've received products from Hong Kong for something I purchased on the internet. How is that taxable?

http://www.youtube.com/user/91177info#p/u/9/Nx5brAqGyL8

President Obama held a press conference today to discuss rising gasoline and oil prices. Gasoline at the pump now costs an average of $3.50 per gallon nationwide, and experts project prices to eclipse $4 per gallon this year, possibly by the beginning of the summer driving season.

But instead of providing a solution that most of America wants — more domestic drilling — President Obama used his presser to recite misleading talking points to justify his anti-energy policies, arguments that have all been thoroughly debunked.

Here are the three biggest myths from President Obama’s remarks this afternoon:

* “We can’t escape the fact that we control only 2% of the world’s oil.” This is a common refrain among anti-drilling Democrats and environmentalists, and it’s repeated enough that many people accept it as true. In reality, it’s 100% false. The number comes from a highly conservative estimate from the Energy Information Administration totaling America’s proven reserves where we are already drilling. It does not include the 10 billion barrels available in the Arctic National Wildlife Refuge. It does not include most of the 86 billion barrels available offshore in the Outer Continental Shelf, most of which President Obama has placed under an executive drilling ban. And it does not include the 800 billion barrels of oil we have locked in shale in Wyoming, Utah, and Colorado. Those shale resources alone are actually three times larger than the proven reserves of Saudi Arabia, so the claim that the U.S. only has 2% of the world’s oil is clearly false.

* “Industry holds leases on tens of millions of acres both offshore and on land where they aren’t producing a thing.” President Obama adds to this whopper by saying he wants to “encourage companies to produce [on] the leases they hold.” While this sounds like a common sense fix, it’s actually just blind rhetoric reserved only for people with a shocking ignorance of drilling. You can read more about this here and here, but it basically boils down to this: A lease is for exploration and production, not just production, and because oil is not equally distributed across the globe, one parcel of leased acreage may not hold any oil. Moreover, due to the circuitous and needlessly complicated permitting process, it can take years for companies who own a lease to complete their exploration activities. To get to the production phase, it could take as long as ten years. Ironically, President Obama wants to tax companies for not producing on their leases, even if the federal government’s refusal to grant permits is the reason why those companies are not drilling.

* “Last year…our oil production reached its highest level in 7 years.” This is pure spin. President Obama is deliberately trying to take credit for actions unrelated to his policies. The increased level of production is due to the actions of previous administrations and production in the Dakotas where most drilling is occurring on private land. By contrast, the Energy Information Administration projects that there will be a decline in production of 220,000 barrels of domestic oil per day in 2011, and in 2012 America will produce 150 million fewer barrels in the Gulf of Mexico, all because of President Obama’s policies to discourage or ban domestic drilling. In addition, President Obama’s drilling moratorium (and subsequent refusal to issue drilling permits) has forced at least 7 rigs to leave the Gulf and sign contracts in other countries, taking much needed jobs and revenue with them.

As gas prices skyrocket, Americans are reminded every day that the federal government’s refusal to allow responsible domestic drilling can have an incredibly destructive economic impact. Instead of trying to fix this problem, the Obama administration has worked every day to make sure that America produces less oil and has to rely more on OPEC for our energy needs.

No amount of White House spin or misleading talking points can change that tragic fact.

More domestic drilling won't solve anything squirt when it comes to the price of gasoline this summer..

Read your own story..