Authorities would have to intercept a transaction as it happens. But it is trivial to encrypt it so that the transmission, even if intercepted, would be secure
What if the authorities are a participant in the transaction? Or do you think that sting operations are beyond the techniques law enforcement organizations will use to track Bitcoin users? Also, Bitcoin users will have to avoid transactions with entites subject to Bank Secrecy Act provisions since they are required to gather information, and make it available to law enforcement, if they suspect the other party is trying to circumvent the Bank Secrecy Act they have an obligation to report it. So much for the protection of encryption if tryng to convert Bitcoins to another currency.
You and Wiki seem to think the government has zero tech savvy employees. I've identified weaknesses in the BItcoin network, and Wiki makes fun of my tech knowledge. Well I'm willing toa admit my limited knowledge, but I'm not fool enough to think that the government is not able to hire people with tech skills superior to anyone who posts on this website. It won't be me chasing Bitcoin users. It will be those experts.
At the same time that law enforcement will be trying to track users for enforcement purposes, criminals will be trying to track Bitcoin users for theft purposes. There will also be tech savvy thiefs who will be trying to gain access to wallets. If they should succeed who does the victim complain to?
What is to stop a government from maintaining a database of every validation request made over the network and using that information to track ownership of every Bitcoin? The only limitation is storage since the information is freely exchanged.