Thursday, June 28, 2012

Brief Thought On The Supreme Court's Health Care Mandate Ruling

Today's Supreme Court ruling upholding the constitutionality of the administration's health care mandate is more than just a recognition of legal precedent.  It provides legal support for the financial repression measures the federal government can potentially take in another economic crisis.  Citizens can thus be legally compelled to invest in things the government deems important (i.e., Treasury bonds) if the normal financial markets collapse.

A mandate is a tax that must be paid, according to this development, regardless of third-party intermediation.    Penalties for non-purchase of goods the government directs citizens to buy can include criminal sanctions.

There will now be no legal appeal for citizens who may be forced to purchase government bonds at above market prices.  There will be no appeal for the forced surrender of precious metals, foreign currency, or other assets at below market prices.

Capital controls of some sort will be part of America's future.  When the gates slam shut, only assets outside the gates will survive unchanged.

Full disclosure:  Long FXA and FXC with covered calls.  Short cash-covered puts under FXF.