Category: Silver

South Carolina Bills Would Take Steps Toward Treating Gold and Silver as Money

South Carolina Bills Would Take Steps Toward Treating Gold and Silver as Money

COLUMBIA, S.C. (Dec. 16, 2019) – Two bills prefiled in the South Carolina House would take important steps toward treating gold and silver as money instead of commodities and could undermine the Federal Reserves monopoly on money.

Rep. Stewart Jones (R-Laurens) filed both bills.

House Bill 4786 (H4786) would effectively exempt gold, silver and platinum bullion from state capital gains taxes. Passage of this legislation would eliminate a significant barrier to using gold and silver in everyday transactions, a foundational step for people to undermine the Federal Reserve’s monopoly on money.

IN PRACTICE

With the passage of H4786, South Carolina would take a step toward treating gold, silver and platinum as money instead of a commodity. As Sound Money Defense League policy director Jp Cortez testified during a committee hearing on a similar bill in Wyoming in 2018, charging taxes on money itself is beyond the pale.

“In effect, states that collect taxes on purchases of precious metals are inherently saying gold and silver are not money at all.”

Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what South Carolina’s capital gains tax on gold and silver bullion does. By eliminating this tax on the exchange of gold and silver, South Carolina would treat specie as money instead of a commodity. This represents a small step toward reestablishing gold and silver as legal tender and breaking down the Fed’s monopoly on money.

“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” former U.S. Rep. Ron Paul said during testimony in support an Arizona bill that repealed capital gains taxes on gold and silver in that state. “Paper is not money, it’s fraud,” he continued.

GOLD BULLION DEPOSITORY

Stewart also prefiled House Bill 4787 (H4787). This joint resolution would create a study committee to determine the feasibility and efficacy of the establishment of a bullion repository in this state to store gold, silver, and other metals for the state’s reserves and for investments. The committee would be required to issue a report of its findings to the General Assembly by January 15, 2021.

South Carolina has a model it could follow. In the summer of 2015, Texas Gov. Doug Abbot signed a law creating a state gold bullion and precious metal depository in his state. The depository received its first deposits in the summer of 2018. The facility will not only provide a secure place for individuals, businesses, cities, counties, government agencies and even other countries to store gold and other precious metals, the law also creates a mechanism to facilitate the everyday use of gold and silver in transactions. In short, a person will eventually be able to deposit gold or silver – and pay other people through electronic means or checks – in sound money.

A state gold repository also creates an avenue toward financial independence. Countries around the world, including China, Russia and Turkey, have been buying gold to limit their dependence on the U.S. dollar. University of Houston political science professor Brandon Rottinghaus said a state depository can serve a similar function for Texas.

“This is another in a long line of ways to make Texas more self-reliant and less tethered to the federal government. The financial impact is small but the political impact is telling, Many conservatives are interested in returning to the gold standard and circumvent the Federal reserve in whatever small way they can.”

The Tennessee legislature passed a resolution declaring support for the creation of a gold bullion depository in the Volunteer State back in 2016, but never followed up with any legislation. If South Carolina does create a study committee, it would be imperative to follow up with further legislation to actually establish a repository once the report is issued.

Stewart has also prefiled a bill that would make gold and silver coins legal tender in the state.

Repealing taxes on gold and silver, and creating institutions that facilitate the use of sound money creates the possibility of currency competition and could ultimately undermine the Federal Reserve’s monopoly on money. Constitutional tender expert Professor William Greene wrote that when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it could create a “reverse Gresham’s effect,” drive out bad money, effectively nullify the Federal Reserve, and end the federal government’s monopoly on money.

“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.”

Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state by state level is what will get us there.

WHAT’S NEXT

H4786 and 4787 will be officially introduced and referred to the House  Committee on Ways and Means when the regular session adjourns on Jan. 13, 2020. They will have to pass committee by a majority vote before moving forward in the legislative process.

Originally appeared in Tenth Amendment Center.

The Great Gold Racket

The Great Gold Racket

How could government be able to control buying power without the public knowing of a direct tax? Hm…

Murray Rothbard said it best when he said that “the threat of gold redeemability imposes a constant check and limit on inflationary issues of government paper. If the government can remove the threat, it can expand and inflate without cease. And so it begins to emit propaganda, trying to persuade the public not to use gold coins in their daily lives.”

Why does government hate the gold standard … or any real standard for that matter?

At the heart of government’s attack on gold, silver, bitcoin, and other commodity standards is an outright hatred for accountability and private property, and a real love for theft.

How It All Began

On April 5th, 1933, President Franklin D. Roosevelt forbade “the hoarding of gold coin, gold bullion, and gold certificates within the continental United States” by executive order 6102.

How could government be able to control buying power without the public knowing of a direct tax?

It had only been 20 years since Congress signed the Federal Reserve Act of 1913 into law in what would become the biggest act of theft and bamboozlement on the American people ever. How would government be able to control buying power without the public knowing of a direct tax? A fractional reserve system run by the power elite allowed for theft at an unprecedented level. It allowed for the manipulation of buying power and the control of all American’s real money and trade.

Then, on January 30th, 1934, the US Gold Reserve Act was signed into law demanding the rendering of gold and gold certificates to the Federal Reserve. The federal government traded paper fiat federal reserve notes at $20.67 per ounce of gold and managed to take more than 8000 tons of gold from the American people. Once the gold was off the market, the federal government raised the rate of gold to $35 per ounce in an attempt to inflate the value of the dollar.

Government then feared that, with the confiscation of gold, people would use silver as a way to curb the control of the Federal Reserve. This resulted to passing of the Silver Purchase Act of 1934 imposing a 50% tax on any transfer of silver and calling for the cease to any silver mining.

Power Moves

Taxation in its simplest form is theft, but government has also stolen by removing any real backing to the US dollar, allowing it the ability to temporarily spend without limit. This is purely an illusion. Making gold illegal gave the federal government unprecedented control over buying power and took real savings from Americans.

The fact is that with the passing of the Federal Reserve Act of 1913 and executive order 6102, the federal government started the disconnect from a gold standard and the confiscation of private gold ownership. This ushered in the printing of federal reserve notes which by 1971 were completely disconnected from any gold standard or any other real commodity backing.

It wasn’t until 1974 that the federal government would lift the ban on private ownership of gold.

Today and Tomorrow

In summary, the federal government created a central bank in 1913. Then it made the private ownership of gold illegal and attacked silver with a tax and control. Government then disconnected the US dollar from a gold standard in 1971 and lifted the ban on gold in 1974. The government literally stole the wealth and real money from the American people.

Gold has survived dictatorships and oligarchies, serving as a standard governments haven’t ignored.

With no standard or a check and balance on government debt, the federal government has been able to spend, temporarily, with no limit. I say temporarily because history shows us that governments have spent themselves into oblivion and eventually the market corrections will occur, reducing empires to rubble. The chains of economic sanity have been eroded by over 100 years of attacks on real market standards and actual money.

While gold has been attacked by governments throughout history, it has also stood the test of time, surviving many dictatorships and oligarchies, still serving as a market standard that governments haven’t ignored.

As the federal government quickly approaches $20 trillion in debt and over $100 trillion in unfunded liabilities, the US dollar will continue to grow as a note of debt. The government’s ability to print debt and spend without limit has only been possible with the Federal Reserve and the attack on real money. Gold, precious metals, and market-based currencies have the ability to outlast any government and give individuals the ability to control their own property.

Originally appeared in FEE.