04/04/11 Baltimore, Maryland – The premium over spot price for a Silver Eagle is up to $4, according to an informal survey we made of dealers today – a signal the Mint can’t keep up with demand.
“Why can’t they keep the supply of coins up?” asks Rep. Ron Paul, chairman of the House Subcommittee on Domestic Monetary Policy. That’s in part a rhetorical question: The Mint doesn’t make its own blanks. “There is a contract with a foreign company, which makes no sense at all.”
Dr. Paul will bring the Mint’s operations under the microscope at his subcommittee’s hearing next Thursday. The Eagle program is near and dear to him. In fact, the program likely wouldn’t exist were it not for Paul’s involvement in the US Gold Commission appointed by President Reagan in 1981.
US Gold and Silver Eagles are now legal tender in Utah.
Actually, they’re legal tender in every state – a 1-ounce Gold Eagle has a face value of $50 – but “the intent would be to see where a gold or silver coin is valued at its market value instead of its face value,” says State Rep. Brad Galvez, who introduced the bill.
“This allows the people of Utah to protect their assets against what we’re seeing in inflation and the devaluation of the dollar.”
Gov. Gary Herbert signed the bill into law last week.
An aide who wished to remain anonymous told CNN, “If somebody is stupid enough that they want to buy a Snickers bar at 7-Eleven with a gold coin worth thousands of dollars, they will be able to do that.”
Uh-huh.
There is one practical effect to the bill: Sales of Gold and Silver Eagles will not be subject to state capital gains taxes; sales of foreign precious metals coins still will.
“So alarming has been the collapse of the dollar,” says writer Seth Lipsky in The Wall Street Journal, “that the legislatures in as many as a dozen American states are considering using their authority – under Article 1, Section 10 of the Constitution – to make legal tender out of gold and silver coins…
“However, the von NotHaus verdict will stand as a warning.”
You may recall von NotHaus was convicted last month of violating a law that makes it illegal, in the words of the FBI press release, “to create private coin or currency systems to compete with official coinage and currency of the United States.”
But as Lipsky points out, that’s not entirely true.
In another wrinkle to an incredibly tangled case, the judge threw out the part of the indictment that claimed “it is a violation of law for private coin systems to compete with the official coinage of the United States.”
You can’t make this stuff up.
“It is not clear that there is a constitutional basis or a logic,” Lipsky concluded in his piece, “for prohibiting individuals from making and selling pieces of gold and silver and using them, on a voluntary basis, as money – i.e., to ‘compete with’ the official coinage of the US.”
To be continued…
“What was left to convict the man on, we don’t know,” added our own Bill Bonner to the von NotHaus saga in Friday’s “Protecting Yourself from the Inexorable Decline of the US Dollar”. “But the court did so. And now he must appeal…or face penalties, possibly time in jail…and possibly a long time.
“But what about the rest of us? Are we sentenced too? Will we be forced to pay the price for the feds’ goofy monetary policies?
“Compare Mr. von NotHaus’s money to the money issued by the US Treasury Department. The Treasury’s dollars have no precious metal content – none. At best, their content comes from trees and cotton plants, with a scrap value that is probably negative. Meaning, if it loses its value as money, you’ll have to pay someone to haul it away.
“So who do the authorities haul to the hoosegow? The guy who mints honest money in tiny quantities…or the guy who puts out $2.2 trillion in ‘paper’ money that is sure to lose its value quickly?
“Go ahead…take a guess.”
Addison Wiggin
for The Daily Reckoning
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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If one has, say a one oz. Silver Eagle, why can’t it be traded for some desired item? No USd monetary value need be be assigned during barter, and barter, so far as I know, has not yet been outlawed.
But how can the IRS get their pound of flesh from all transactions if it is not measured in Dollars? They are discouraging barter clubs for the same reason. When things go bad, everyone will be engaging in “illegal” transactions.
Just don’t make a sign saying you will buy or sell something or the IRS will consider you are in business and must produce all the paperwork on your income.
why is any “law” needed to prohibit a tax on transacting in “money” as per the Constitution?
answer? it isn’t!
now that these fat freaks are finding real money more useful than bogus “boss hog” taxes, the hypocrites are changing their “legal” tune, and trying to change their tiger stripes, too!
if you and bill don’t know what nuthouse was convicted of, why don’t you just google it, like anybody else, stop making fools of yourselves, and stop treating your readers like they’re ALL morons, ok?
von nuthouse made some genuine mistakes.
plus, when you see that he “waived time” and took a losing “case” to trial, you might sense a certain “smell” around his legal counsel, too.
what this man was thinking, to proceed this way, after his arraignment, defies all logic. why not rush into the court of public opinion and the trial court at the same time just screaming about silver, the constitution and the meaning of money.
i’m sure it wouldn’t have made much legal sense, but i think the public woulda liked it, and maybe the jury woulda cut him some big slackeroo if the feds didn’t have the extra 7 months to prepare the guy’s BBQ on a spit.
you and bill go ahead and do the screaming. but please don’t scream non-sense, at this point.
johnny silver bear has his own silver rounds, as do many others. these folks do not make legal mistakes and the FBI is not cleaning them up and out, either.