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Congressmen Weiner and Waxman Set Gold Hearing

Sep. 16, 2010 11:31 AM ETGLD, IAU, SGOL369 Comments
Ira Stoll profile picture
Ira Stoll

Just as the government is trying to prevent people from investing in anything other than T-Bills by raising taxes on taxable interest and dividends to confiscatory levels, it's also trying to prevent you from parking your wealth in assets, like gold, that compete with the paper dollars issued by the Federal Reserve and the Treasury. A press release from Rep. Anthony Weiner, Democrat of New York, not yet (as of this instant) posted on Mr. Weiner's Web site, announces that a September 23 hearing of the Subcommittee on Commerce, Trade, and Consumer Protection (a subcommittee of Rep. Henry Waxman's Commerce Committee) will focus on "legislation that would regulate gold-selling companies, an industry who's [sic] relentless advertising is now staple of cable television."

From the press release: "Under Rep. Weiner's bill, companies like Goldline would be required to disclose the reasonable resale value of items being sold." That's great. Are Mr. Weiner and Chairman Bernanke also going to agree to print on every dollar the reasonable expectation that its value will be eroded by inflation?

Gold investors (or speculators) are already punished by the federal government by having their investment, even in a gold exchange-traded-fund, taxed at the higher rates that apply to collectibles rather than long term capital gains.

Not to mention the fact that Mr. Weiner's regulatory push seems as much aimed at conservative journalists as at the gold-dealers. The press release says, "Goldline employs several conservative pundits to act as shills for its' [sic] precious metal business, including Glenn Beck, Mike Huckabee, Laura Ingraham, and Fred Thompson. By drumming up public fears during financially uncertain times, conservative pundits are able to drive a false narrative. Glenn Beck for example has dedicated entire segments of his program to explaining why the U.S. money supply is destined for hyperinflation with Barack Obama as president."

This article was written by

Ira Stoll profile picture
Ira Stoll is author of Samuel Adams: A Life (Free Press, 2008). He was vice president and managing editor of the New York Sun, which he helped to found, from its debut in 2002 until its demise in 2008. Before that he was a consultant to the editorial page of the Wall Street Journal, North American editor of the Jerusalem Post, editor of Smartertimes.com, Washington correspondent and then managing editor of the Forward, and a reporter for the Los Angeles Times. He is a graduate of Harvard, where he was president of the Harvard Crimson. He lives in New York City.

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Comments (369)

Dopamine profile picture
My concern, is that by making controls on selling gold coins, precious metals, that arent sold in Banks...Arent sold in banks....

That they are trying to curb the private sale of the coins, and in the future the black market....way before there is a black market. This way, when the price soars,........they do....have a valid reason to nab you for not paying tax on the sale.

Waxman is the Tax man.
Bounds Auction Company profile picture
I didn't say that I agreed that attacking Iran was a smart move - only that in consideration of the prevailing philosophy of US foreign policy -inevitable. Avoidable ? Only if we pack up and leave the entire middle east. Iran doesn't have to be the next extension of the war - Pakistan is now on the hot seat. The nuclear disarmament of Pakistan might be the next mission statement.

I have to admit that I threw the fascist/leftest comment in there expecting gebby to take the bait - and - he did.

Many, including scholars are mistaken in that the term must always apply to an extreme "right wing" within a left/ right paradigm. Wrong both in context and historically. Fascism is rooted in socialism. Often referred to as the 3rd way or corporatism. The merger of statism & industry.

The belief or idea that Fascism & Communism were opposites rests only in that during their rise in the early 20th century they were competitors for power. Both sprung from the same argument. In outcome, there was little difference except that the Fascist methodology seems to have - if not won, outlasted that of the Communists.

Think of it as Hegel's dialectic outlasting Marx's dialectic materialism . More accurately, an evolutionary refinement of both.

China is a fine example of 21st century fascism.

Just because the tailored suit and power tie has replaced the military uniform as a fashion statement, doesn't mean that they aren't fascists.

As rhetorical dialogue, I can't help but viewing an action of a govt body, such as this truly puny attempt of the Wiener/Waxman to "investigate" a single retail gold marketer as being Fascistic in nature. Puny, useless and pathetic, but Fascist none the less.

They clearly intended to produce a Hegelian outcome by which first a "crisis" is created out of thin air (in this case activity of a gold retailer), an action undertaken ( an investigation that will reveal that the entire retail gold market is counter their views of a top down managed economy) and a predetermined solution imposed. (regulation of gold trading )

Not that I believe that Waxman & Weiner really care whether or not you own gold coins or not - simply that it is an activity outside of their control and it fit their anti-conservative political agenda .
Control is the #1 - 21th century Fascist/Statist's aphrodisiac.

Whether the Wieners & Waxmans of the world succeed or not is an argument destined to end as most arguments do, in sophistry.
gebby profile picture
bond auction company, if you knew anyhting about game theory you would know that going to war with iran is a losing proposition for the u.s. your comments are based on attitude and not fact. you can start by looking up the definition of fascism. you need to study history, economic and political. game theory would help also.
Bounds Auction Company profile picture
Americanincanada: You are somehow assuming that 911 would not have occurred if Gore had won that election, that a Democrat White House wouldn't have gone into Iraq as well as other assumptions. I beg to differ because 1. we can not know and 2. Gore's fascist/leftist policies would have broken the economy all that much sooner/ with or without Iraq.
I agree with you on Iran - and you are right in that the Reps face a challenge of philosophy, but confrontation with Iran is inevitable with the establishment of either party and I believe all that much sooner due to the domination of Clinton policy by the Brzezinski, " Grand Chessboard" , Central Asian philosophy. Obama is clueless. Hillary is doing her best to pick a fight anywhere she can find one and one with Iran would be her ticket to the White House.
If Clinton can find a way to take China's opposition out of the Iranian equation & not kill any Russian guest nuke workers in the process - Iran is toast - Obama chooses not to run and the Clintons return to power.

Now, gold & silver. Last week, two sets of sterling sold at auction. Both were identical in piece count and troy weight. The 1st set was a well known manufacturer/ designer, but was a very simple pattern. It sold for spot. The 2nd was by George Jensen ( high end European designer ) and was a desirable pattern. It sold for 5 X spot. If you took a hammer to them - all you would have was spot value. The ONLY difference is that George Jensen designs are believed to be aesthetically superior and therefor more valuable by a market segment.

So, that people are willing to pay more from one gold supplier than another, for whatever reason, doesn't make it a crime. Foolish perhaps, but not illegal or necessarily immoral.

Its called Marketing.

Bounds Auction Company profile picture
Starbucks is raising prices again - Scandal - swindle - rip off !
We must call a congressional committee to empower a special prosecutor! I'm tired of being ripped off by BIG Coffee! We must root out this corruption once and for all! Where's Waxman & Weiner when we need them?
Sorry, I forgot that Starbucks doesn't sponsor the opposition, so I guess congress isn't interested. I'll just have to buy my gold - I mean coffee, down the road at Rosland Capital - opps - G Gordon Liddy - can't go there.
Guess I'll have to do without until Waxman & Weiner tell us who the APPROVED vendor is.
gebby profile picture
many commented here before the hearings took place. it was pointed out in the hearings that goldline marks up 180%. this is a scam. weiner....good job.
22 Sep. 2010
Hey Weiner, lets say two years ago, I invested 10K in gold and 10K in the stocks of GM, Chrysler, Fannie Mae & Freddie Mac.

What would be worth more now EVEN IF I BOUGHT THE GOLD FROM GOLDLINE.?

The stocks from GM, Chrysler, Fannie Mae & Freddie Mac would be WORTHLESS as these companies are in receivership.

Gold closed today at $1,290 AN OUNCE. It was around $880 or so two years ago.

robert.b.ferguson profile picture
Bounds Auction Company: Greetings. One of the better posts on the thread. I'm also fairly sure that gold trading is just about the least of our problems as posted in an earlier comment. Welcome.
Bounds Auction Company profile picture
RE Broker: Correct. This is politics. If it were about consumer protection, there's already 10 agencies covering that and if Goldline were breaking the law - they would likely have already been shuttered.
Mildred Pierce: Palin isn't currently a politician - she's playing at pundit and brains aren't a requirement for either> hope she doesn't make the mistake of running. We already have 1 drama queen in the White House and don't need another.
Gebby: You are mistaking political cycles for business cycles. American manufacturing was exported wholesale under Dem controlled congresses and like many - are thinking that Bush Jr was a conservative. He wasn't.

This Dem party of 2008 is way left of the Dem party of 1992. As bad as Bush Jr was - can you even imagine where we would be after 8 years of Al Gore. Trading gold would be the least of our problems.
gebby profile picture
it is amazing, it is because of a democratic congress? not reagan? when will you take responsibility for the presidents you elect? government policy is set by the president. people on this thread are so ready to have a free market but there hasnt been a free market in america since 1880. the government is us, the people. we live in a democracy and we got what the majority voted for. the democratic party is main stream. name calling (socialism) doesnt make it left wing.
I would tend to agree that Gore would have been bad, but we would have had a trillion dollars in our pocket and hundreds of thousands of people would be alive if we were not undemocratically taken into a war, as Bush did. The Democrats misinterpreted or misused their election victory by thinking they had a mandate for some fundamental changes. They did not, and will pay the price in the elections. Whether the Republicans can offer much as an alternative is not clear. People do not want to start bombing Iran, at least not yet. It will take a lot more brainwashing in the media to get them to that point. They also are not antiabortion, anti gay, pro school prayer people. So if the Republicans chose candidates that are social conservatives and defenders of the empire then they will lose and the economic small government conservatives among us will suffer more.
robert.b.ferguson profile picture
Let's try to stay on topic. Much as I would rather vote for a witch than a marxist it has nothing to do with the investigation of Gold Line. If you want to discuss the relative merits of policies advanced by one party or another post your own Insta on the subject. I'm sure the discussion will be lively. I don't know how the Palins fit in here at all other than as a distractor.
gebby profile picture
the stock market and gold market are going up thanks to the democrats. those of you that think republicans are good for the stock market or gold market should look at your history books. if you like investing and you praise republican government you need to learn. republican governmets promote policies that are good for taking long term profits. the really big money sold under bush....they were given every incentive in the world. and most small folk were given the incentive to buy from them. every old industry companies stock rallied and was sold never to be seen again. us.steel for example.....look at the chart. go dems!
Its the governments job to enforce laws, not add regulations that $$$ pad $$$ their $$ pcokets

If goldline says ____ and doesn't fulfill that , then prosecute them

IF PEOPLE ARE "FOOLED" BY THEIR OWN LACK OF UNDERSTANDING OR "GREED" THEN instead of doing it the LEFTISTS WAY AND WRITING THOSE NEW $$REGS, just chalk it up to peoples lack of knowledge
Weiner has a weenie for a brain !!
Mildred Pierce profile picture
Good thing Sarah Palin has the weeniest brain in politics today.
None of this is about gold; it is about the gold companies advertising on Limbaugh, beck, Levin etc. It is about censorship. Liberals don't like people talking back to them or resisting their stupid legislation. They see Nov coming and know they will be dropping like leaves after the next election.
Mildred Pierce profile picture
Good, can't wait for Christine O'Donnell to bring a bill outlawing masturbation and one promoting witchcraft.
robert.b.ferguson profile picture
Perhaps if the majority party since 2006 had been paying more attention to the watch dogs who were in front of thier computers watching p0rn and pounding thier puds we could have avoided some of this. Nah they were too busy pounding thier own.
Why even trade gold for cash? I spend bullion silver and gold coinage like currency as I know people will take it in trade for goods and services. Gold and silver is legal tender, cash is play money! Cash cannot hold its value against inflation, accumulating interest, endless printing, fractional reserve banking and spending by the Federal Reserve and government. If paper money is unbacked by REAL MONEY then what is paper money worth? That's the question that needs to be asked and addressed by Congressman Weiner!

"Disclose the reasonable resale value of items being sold"? The price of gold or any commodity varies day to day and minute to minute. There's no logical way such a plan could be accomplished. The price of gold can only be determined by its supply and demand.

Anthony Weiner is my Congressman as I live in his district and have spoken with the man personally. Why doesn't he understand that the price of gold can only be determined by the market? Why don't democrats understand the obvious when it comes to economics? It's like they live with blinders over their eyes in terms of money matters and budgeting. Maybe they're just uneducated and have their heads in the clouds when faced with situations dealing with reality?

Ron Paul for President in 2012, from a Queens, NY resident! End the madness! We need a crackdown on the Federal Reserve Banking system which is the bull's-eye of monetary corruption, not gold! A system of gold and silver money is the solution! If we intend to get out of the financial quagmire facing America's economy we must go after the disease and not destroy its cure!
I cant answer for Mr Weiners motives, but I think his proposition is to oversee potential consumer rip-off chicanery that goldline apparently engages in, not to prevent the consumer from buying and selling gold. As usual mom and pop get screwed if they call these guys, and nobody seems to want to take any responsibility to do anything about it... the scam is some poor schmuck calls because glen beck or some other nitwit "celebrity" tells them the sky is falling, and the only way to protect your assets is to buy gold which never loses itts value, and the way to buy that gold is from goldline who apparently adds punitive markups, commissions and handling charges as to make a future return on ones investment questionable at best. why does this story sound familiar. I may buy the story that when a crisis comes gold will be the only remaining store of value available, but I think there is a better way to play the story than get ripped off by these charlatans. Having invested substantial portions of my assets in gold companies in the 1990's I can also assure you that gold can take a fast and precipitous dive, when you least expect it. when the cost per ounce drops below its mining costs, which has happened twice in my lifetime. Anybody investing in gold should be aware of that fact before thinking about investing in the metal.
robert.b.ferguson profile picture
Any one who doesn't understand the asset class they are contemplating investing in shouldn't putt their money there regardless of who the pitch man is. Dealers, Brokers and online trading firms all sell their wares at different prices and the investor must ultimately decide which ones make sense to them. For example Scott Trade does $7.95 unlimited trades. E-Trade does $5.95 unlimited trades (Not real numbers). Does that make Scott Trade a criminal out fit? I would say no just as AMPEX underselling Gold Line most of the time does not mean they don't make a profit. I don't see Waxman and company investigating that. Do you?
Bounds Auction Company profile picture
I have seen a lot of people pay too much for gold & silver. I don't get why anyone would buy coins of supposed numistic value at 2x spot or more unless they knew what they were doing from a collector point of view - and most who do - don't. Anyone see what high condition silver dollars are trading at lately - especially Carson Cities?
The LAST place I would look for gold coinage would be retailers like Goldline ( and others ) but they have the right to charge whatever they want. And I say caveat emptor.
As for gold as an investment - as long as they continue to debase the dollar and real estate continues its fall - I'm in. And I only pay spot.
The Dems are doing this witch hunt to get even with the company for advertising on Beck's show. They had one uppity business that did not obey the orders to stop advertising on the program. They are fascist pigs.
The gold market as it currently exists is corrupt. It's just that simple.

People get scared and they buy gold, so the fearmongers are pushing gold. Gee, I wonder what their motovation is?

Here's a hot tip. If things get really bad, gold isn't going to do you any good. What you will need is food and water. So should you hoarde food and water instead of gold? Probably not. If all the irrational fears that cause people to buy gold come to pass, what you want to own is guns and bullets. With those you will be able to get all the food, water and gold that you want. At least until someone comes along with more guns and bullets than you have.

I've maintained for years that if you were to take all of the money in the country and divide it evenly amongst every adult in the country, within 2 years it would all be redistributed roughly as it is currently distributed. That's because, although all men may be created equal, some learn a lot more than others along the way, and stupid people are gullible people.
taxed2much profile picture
The absolute greed of the gov't has got to be ended. The people in this country need to stand up and force these overreaching boobs pretending to know what and how to do their appointed tasks fairly to either perform them within the capacity allowed by law or take a hike. I am sick and tired of all these agencies they keep forming that only perform the duty to fine or tax us. This is BS.
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