D Johnson

Could Ownership of Companies Like Silver Wheaton Be Outlawed?

I came upon an interesting angle (on the web) on gold or silver coins that I had not thought about before. The author claimed that since a $50 gold piece (market value of $1,000) or silver dollar (market value of $11.50), or other precious metal U.S. coin, is still a legal tender for its face value, that one could chose to get paid for their labor at the face value of the coin and pay income tax on that face value only. The author further claimed that (by IRS ruling) income taxes owed could not be collected by the IRS on the market value of the coin until it was sold. Tax deferral anyone? Disclaimer: The above is not my advice to anyone. I am not a tax attorney.

Could Ownership of Companies Like Silver Wheaton Be Outlawed?

FDR's gold confiscation of 1933 did not forbid gold ownership by U.S. citizens. If you read the complete executive order, each citizen was allowed to keep up to $100 in gold coin. That would be $500 for a family of five. However, on January 30, 1934, the Gold Reserve Act was passed that did, indeed, outlaw all gold bullion and gold coin (except collector coins of higher value) held by citizens. The Emergency Banking Act of 1934 (along with the Gold Reserve Act) made contracts payable in gold invalid. Why? A gold clause in a private contract was the only way a citizen could protect his purchasing power, as a gold revaluation (devaluation of the dollar) was expected by the populace. The acts in 1934 revalued gold to $35 per troy ounce. However, Under President G. Ford, in 1975, gold could again be freely traded by U.S. citizens. Finally, Congress later reinstated the option to use gold clauses for obligations (new contracts) issued after October 1977 in accordance with 31 U.S.C. § 5118(d)(2), and their legality was upheld by the courts.

Could Ownership of Companies Like Silver Wheaton Be Outlawed?

The banks, by 1933, had created more money than they could back by their gold, so people were exchanging their dollars for gold, and creating a run on the banks. FDR outlawed gold ownership by citizens to save the banks -- many of which failed anyways due to bad loans. However, since we are no longer on a gold standard, the people will not fall for this fraud again. People that own gold now, have purchased it as an insurance policy to protect their wealth. Today, the government would have to do door-to-door searches to get the gold, and even then, would be unsuccessful. If the gov't did try such a foolish thing, there would already be price controls, exchange controls, and a whole new black market (and a new class of "criminal") already in place. Ron Paul's "Edit the FED" bill (if passed as written) includes an audit of U.S. Gold. If, as I suspect, it has all been leased out or sold, the FED will have a lot of explaining to do. People will demand an end to the FED, and all bets will be off as to what congress would do then.