Gold as a currency more than a commodity

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ao's picture
ao
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Gold as a currency more than a commodity

For those of you who follow Jim Sinclair, this is nothing new.  It's what he's been saying all along. 

http://online.wsj.com/article/SB10001424052748703908704575433670771742884.html?mod=WSJ_hps_sections_personalfinance#printMode

 

Ken C's picture
Ken C
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Re: Gold as a currency more than a commodity

 

ao wrote:

For those of you who follow Jim Sinclair, this is nothing new.  It's what he's been saying all along. 

http://online.wsj.com/article/SB10001424052748703908704575433670771742884.html?mod=WSJ_hps_sections_personalfinance#printMode

 

 

I posted this over in the subsrciber area but it seems appropriate for this discussion also.

Jeff Nielson at Bullion Bulls Canada takes the view of using gold as a currency and provides an excellent discussion about "converting"  legal tender FRNs to legal tender gold bullion coins instead of buying/selling gold as commodity. This has tax implications and I recommend reading the entire article.

http://www.bullionbullscanada.com/index....

Here are a few snippets

....

I hold legal tender, minted coins, and I don't “sell” them – so I can't be considered a “trader”. I have thus legally established that my bullion is currency not commodity. So far, so good. However, astute readers will have already seen a gap in my strategy: no “end game”. It's great to store your wealth in bullion to prevent theft-by-inflation, and to do so in a way which legally avoids your “insurance” from being taxed. The problem is how do you ever utilize such wealth? Perhaps a few have figured out the simple answer to this question. You do exactly what you do with your other currencies: you “spend” it.
...

The response to critics of this strategy is obvious: it's currently almost impossible to systematically “spend” bullion in our societies/economies. My reply is equally obvious: as I stated earlier, people should not be spending their “insurance” today, period – because it is not yet needed. More importantly, by the time we do need to rely upon our precious metals insurance, in that future-world we will have no problem at all in “spending” our bullion.

...

robie robinson's picture
robie robinson
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Re: Gold as a currency more than a commodity

Our business will happily take legal tender(PM's)as payment for meat,milk,commodities,produce...if we grow it you can and will be able to buy in non fiat currency.

 

robie (barter sometimes accepted) i need a smiley emoticon

LogansRun's picture
LogansRun
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Re: Gold as a currency more than a commodity

Goes hand in hand with this video.

!

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Re: Gold as a currency more than a commodity
robie robinson wrote:

Our business will happily take legal tender(PM's)as payment for meat,milk,commodities,produce...if we grow it you can and will be able to buy in non fiat currency.

 

 

Lot of folks will take hard currency in payment.  Paid $10 recently for a crown at my dentist.  10 "real" US dollars...1880's gold variety.  He charges 700 of the fiat paper notes for the same procedure.

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LogansRun
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Re: Gold as a currency more than a commodity

Was that an Indian Head?  If so, he took a gold coin, in which todays value would be around $550, on a service that would cost $700 in FRN's!  OUTSTANDING!  

 

TNdancer wrote:
robie robinson wrote:

Our business will happily take legal tender(PM's)as payment for meat,milk,commodities,produce...if we grow it you can and will be able to buy in non fiat currency.

 

 

Lot of folks will take hard currency in payment.  Paid $10 recently for a crown at my dentist.  10 "real" US dollars...1880's gold variety.  He charges 700 of the fiat paper notes for the same procedure.

ao's picture
ao
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Re: Gold as a currency more than a commodity
robie robinson wrote:

Our business will happily take legal tender(PM's)as payment for meat,milk,commodities,produce...if we grow it you can and will be able to buy in non fiat currency.

 

robie (barter sometimes accepted) i need a smiley emoticon

How do you pay taxes on that?

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TNdancer
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Re: Gold as a currency more than a commodity
LogansRun wrote:

Was that an Indian Head?  If so, he took a gold coin, in which todays value would be around $550, on a service that would cost $700 in FRN's!  OUTSTANDING!  

 

 

No, he took $10 in legal tender rather than 700 "dollars" in legal tender.  It was his choice either way, I offered both.

 

Tax wise, IMHO, he had $10 income.  That could change should he decide to convert the $10 coin to some pile of Federal Reserve Notes...but the best thing to do is exactly what I did....use it to buy something when you want it.......skip the middleman ( Federal Reserve ).

 

I can  forsee a day when it will be more common to have two prices on things.....both legal tender, but one for metal money, and one for paper/plastic.   I help it along every chance I get. Wink

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perthtam
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Re: Gold as a currency more than a commodity

I agree with dual pricing in metal and fiat money.

As someone who worked in gold mines in the past a couple of oddball questions:

1. Do oyu think gold samples will be generally accepted instead of coins (difficult to work out exactly how much but plenty is visible to the naked eye)?  Guess it would just be down to bartering at the time

2. How long before people know how to recognise fools gold from the real stuff?

 

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Re: Gold as a currency more than a commodity

This quote seems relevant here:

"In the absence of a gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good and thereafter decline to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as claims on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to be able to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." -- Alan Greenspan, 'Gold and Economic Freedom' in 1966.

 

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robie robinson
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Re: Gold as a currency more than a commodity

robie robinson wrote:

 

Our business will happily take legal tender(PM's)as payment for meat,milk,commodities,produce...if we grow it you can and will be able to buy in non fiat currency.

 

robie (barter sometimes accepted) i need a smiley emoticon

 

 

How do you pay taxes on that?

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campton123
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Re: Gold as a currency more than a commodity

Hi

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