Here’s What Arizona, Texas, North Carolina, Virginia, Idaho, Etc. Are Doing… (Podcast)
Here’s What Arizona, Texas, North Carolina, Virginia, Idaho, Etc. Are Doing… Podcast – Money Metals
Coming up on today’s program we’ll have a special report on sound money legislation at the state level. Be sure to stick around to find out which states are in the process of advancing the cause of restoring gold and silver as money. First, though, let’s take a brief look at this week’s market action in the precious metals.
Metals markets are coming in mixed this week, with gold little changed, silver down, and platinum continuing to gain upside momentum so far in 2018. As of this Friday recording, gold is up 0.8% for the week to bring spot prices to $1,331 an ounce. Silver shows a weekly loss of 0.5% and now checks in at $17.15. Platinum is up 3.0% this week to $1,001 per ounce, while palladium is up 1.1% to $1,107.
In crypto-currencies, Bitcoin prices fell hard mid week on reports that South Korea is moving to ban trading of digital currencies. Meanwhile, Warren Buffett told CNBC that he believes the crypto-currency boom will ultimately end badly.
Warren Buffett: In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending. Now, when it happens or how or anything else, I don’t know, but I know this, if I could buy long-term puts, if I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it.
As a large shareholder of big banks and other financial companies that benefit from the current, centrally controlled monetary system, perhaps Buffett is talking his own book. But as an investor whose portfolio has grown more than one million percent since 1965, Buffett has been right far more often than he’s been wrong. His bearish take on Bitcoin shouldn’t be dismissed lightly.
We don’t think the blockchain technology will be going away, but some individual crypto-currencies could crash and burn. They are inherently speculative and have no intrinsic backing to give them a downside floor.
A truly sound crypto-currency would marry blockchain technology with a universally recognized source of intrinsic value such as gold. Until crypto-gold catches on through a reliable and secure digital vehicle, holders of Bitcoin and other cryptos who are concerned about unlimited downside risk may wish to exchange their digital currency for hard currency in the form of precious metals bullion.
Money Metals Exchange is already THE industry leader in accepting a variety of crypto-currencies as payment for bullion orders. And more and more owners of crypto-currency are contacting us every day. We’ve done transactions involving many more cryptos than JUST Bitcoin, such as Bitcoin Cash, Ethereum, Dash, Ripple, Litecoin, EOS, and several others.
Through our Sound Money Defense League public policy project, we also take an active interest in the progress of sound money principles at all levels of government. Over the past few years, several states have made legislative advances in ending taxation on physical precious metals and allowing them to be used more freely as money in place of U.S. fiat dollars.
In 2017, Arizona, Louisiana, Virginia, Texas, and North Carolina, and even Minnesota made progress on the sound money front. In 2018, other states could do so as well.
36 states have already removed sales taxes from precious metals transactions, and bills being pushed this year by sound money advocates in Alabama and Tennessee could add to that list.
Both Utah and Oklahoma have passed legal tender laws recognizing gold and silver as money. The monetary metals can be used freely as a means of payment.
Meanwhile, a bill expected to be introduced in Wyoming next month would repeal both sales and income taxes on bullion while also affirming gold and silver as legal tender and strengthening gold clause contracts.
Other states, including Arizona and Idaho, have moved forward on legislation to exempt gold and silver bullion from capital gains taxes. Since Money Metals Exchange is located in Idaho, we would be particularly excited to see our national headquarters state become a haven for sound money.
Last year, a bill to eliminate capital gains taxes on precious metals passed the Idaho House. Money Metals President Stefan Gleason testified before the House Committee on Revenue and Taxation, and here is some of what he had to say:
Stefan Gleason: Our mission is to educate people also about precious metals and help them diversify into this reliable and more stable form of money, really truly a Constitutional money with tremendous history going back to the founding of our country. Gold and silver have been chosen for thousands of years as money because of their qualities as financial insurance, as a store of value, and its practicality as a medium of exchange. The bill I want to talk about today is a straightforward bill. Basically, we don’t want to tax money in Idaho. Idaho already does not tax precious metals with its sales tax, and we’re asking for it to be removed from the calculation of income tax in Idaho.
The Founders of our nation dealt with the collapse of the un-backed continental dollar, and that was fresh in their minds when they created our monetary system and established gold and silver as our nation’s money. In fact, the dollar was defined as a fixed amount of silver, and even in the Constitution the Founders restricted states from making payment in anything other than gold and silver coins for payment of debt. For the first hundred years, our nation’s money gold and silver coinage maintained its purchasing power pretty much consistently, except for a small period of time during the Civil War when we went off the gold standard.
But then about 100 years ago the Federal Reserve was created, and since that time we’ve seen a dramatic decline in the purchasing power of what is now considered the dollar but really is called the Federal Reserve Note. Of course, the last link to gold was severed officially in 1971, and that has led to an acceleration of this devaluation in purchasing power and an explosion in federal government debt during that same period of time.
The people that are most harmed by inflation are wage earners and savers. When the dollar goes down in purchasing power, they lose. Fortunately, an increasing number of citizens are recognizing that owning gold and silver as an alternative form of savings is a good way of protecting some of their wealth, protecting some of their purchasing power, and standing against this ongoing devaluation. It’s also something that helps in periods of financial turmoil, which seem to be increasing under our current system. Gold and silver are a safe haven.
Under current law, however, when a taxpayer sells their precious metals, they may end up with a capital gain because it’s measured against the Federal Reserve Notes that they sell it for. Now it may not be a real gain. In most cases it’s not a real gain. It’s a nominal gain. It’s an illusory gain. Yet it’s still something that triggers taxation at the federal level, and a taxpayer has to include that in their taxable income if they sold gold and silver bullion or coins.
It’s even taxed at a discriminatorily high 28% rate for long-term capital gains… It’s 15 and 20 for other types of assets. Then Idaho in the calculation of Idaho taxable income essentially carries forward that income number, and then there’s some adjustments that are made on various things according to Idaho statutes to arrive at the Idaho taxable income.
This legislation simply would back out the federal income or loss that somebody reports on precious metals out of their Idaho taxable income. This is something that Idaho can do. Obviously, we can’t mess with federal tax laws, but Idaho decides what it’s taxing as income, and we propose with this legislation that precious metals be removed, because it’s money.
Also weighing in on behalf of Idaho’s bill to free precious metals from state taxation was an executive of a freedom minded group in the Gem State.