Rocky just found another reason to explain the strong bull market in gold: Tax Evasion.
Last week, UBS (Switzerland’s largest bank) agreed to pay a $780 million fine, and provide a limited list of American tax evaders to the IRS. The next day, the Justice Department sued UBS to provide an additional 52,000 names of Americans with secret bank accounts.
The eponymous U.S. District Judge Alan Gold, presides over the case — which may end decades of Swiss bank secrecy, a country where tax evasion is not a crime.
Rocky speculates that tax evaders from around the world are descending onto the Gnomes of Zurich, and hastily withdrawing cash ahead of Judge Gold’s verdict. He posits that these unsavory un-Americans are buying gold with the proceeds — a fungible store of wealth that cannot be traced.
[Disclosure: Rocky complains about taxes, but he always pays his legally required minimum. He also remains long gold, but his view may change at any time.]