no third solution

Blogging about liberty, anarchy, economics and politics

New Hampshire Gold Bill

January 29th, 2009

Steve Gresh posted a link on facebook. The legislature in NH wants to permit the use of gold/silver coins.

Let’s see them permit the use without subjecting their constituents to usurious capital gains taxes!

Under the proposed legislation, those citizens of New Hampshire who prefer to use irredeemable Federal Reserve Notes and base-metallic coinage may continue to do so. But they will make this choice intelligently, knowing of their option to use silver and gold coin instead.

And they would be idiots to use Gold/Silver coins for any on-the-books transactions.

Due to Gresham’s Law (which only applies when one currency is artificially overvalued vs. another currency) most people acting intelligently would choose to hoard gold and spend FRNs. Given the choice, they’d all like to remit payments in FRNs, but would only accept gold/silver as payment, themselves.

The proposed legislation in NH (and elsewhere) stands in direct contravention to the privilege bestowed upon federal reserve notes. Because of Federal legal tender status granted to FRNs, except for rare instances nobody can refuse to accept FRNs as payment.

Holding commodity metal subjects you to the capital gains taxes should the value of the metal in terms of FRNs increase. As long as Uncle Sam is fighting Trillion Dollar Wars, that price is going to keep inching upwards.  If you go off the books, you can escape that slave-fee.  Even if the long-term return on commodity metal like gold or silver is zero, a zero return is <em>excellent</em> in this economy (my 401k is now a 201k, as the saying goes).  Even in better economic times, a zero return is great if you’re not paying taxes.

If you’re going to use gold/silver as payment for goods and services, you should do it off-the-books.

Issues like “Should New Hampshire allow people to use gold/silver coins?” are red herrings, that distract people from the real problem which is the state-enforced banking cartel and legal tender laws.

Comments

9 Comments

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  • geit says on: January 29, 2009 at 11:21 pm

     

    http://www.ustreas.gov/education/faq/currency/legal-tender.shtml

    “There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise.”

  • FSK says on: January 29, 2009 at 11:30 pm

     

    This law is nothing new. In the past, some states have tried this and were shot down by the US Supreme Court. The US Supreme Court has already ruled that individual states issuing their own gold and silver money usurps the Federal government’s power to control money. Even if New Hampshire passed their law, and wrote it in a non-stupid fashion, it could be shot down by the US Supreme Court.

    There already are Federal laws and taxes that make it impractical/illegal to operate a gold and silver warehouse receipt bank. Unless New Hampshire says “**** you!” to the Federal government and blocks enforcement of those laws, New Hampshire accomplishes nothing.

    It would only be interesting if New Hampshire made such a law, the Supreme Court shot it down, and New Hampshire’s politicians said “Nyah! Nyah! We’re doing it anyway!”

  • David Z says on: January 30, 2009 at 7:19 am

     

    Nice try Geit – did you even read the rest of that page, which essentially says that although individual businesses can make rules regarding the forms of payment they accept (e.g., you can’t pay your bus fare with pennies, or the liquor store won’t take a $50 bill, etc.) under most circumstances they have to accept payment denominated in government monopoly money.

    The distinction is not between FRNs and government issued coinage, or Money orders denominated in FRNs, or credit cards representing FRNs…

  • Highlander says on: January 30, 2009 at 1:38 pm

     

    USC Art. I, Section 10:
    —————
    No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; MAKE ANYTHING BUT GOLD AND SILVER COIN A TENDER IN PAYMENT OF DEBTS; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.
    —————
    So far, the USC has NOT been amended to allow the FRNs to be used in lieu of GOLD AND SILVER coin.

    • David Z says on: January 30, 2009 at 3:28 pm

       

      Sounds great, in theory, but how do you answer 7 or 8 decades worth of legal decisions which directly contradict the constitutional argument. SCOTUS wouldn’t even hear the case.

      With apologies to Spooner, whose quote I’m amending to fit the topic at hand, “Your constitution has either authorized such violations, or it has been powerless to prevent them. In either case, it is unfit to exist.”

  • betsyross says on: January 30, 2009 at 4:54 pm

     

    what a surprise the site is down.

    • David Z says on: January 30, 2009 at 9:11 pm

       

      What a surprise, indeed! Ever hear of “Your comment is being held for moderation”?

      Akismet has deleted 25,000+ spam comments, excuse me for holding first-time comments in queue.

  • Alexander Goristal says on: January 30, 2009 at 6:42 pm

     

    “…except for rare instances nobody can refuse to accept FRNs as payment…”

    Word up: EZPASS

    AlexG

  • David Z says on: January 30, 2009 at 7:22 pm

     

    @ Alex and everyone else who thinks an EZPASS or a credit card or a money order or a personal check is constitutes one of the “rare instances” where someone can refuse to accept FRNs as payment:

    YOU ARE FLUNKING LIFE.

    All of those media of exchange are denominated in, backed and funded by federal reserve notes.

no third solution

Blogging about liberty, anarchy, economics and politics