Another Of Dumb Erics' Stupid Questions

A number of years ago I contacted ScotiaBank in Canada and talked to one of their bullion analysts about a related issue as it related to Maple Leafs. At the time, silver was about $6 per ounce and I was interested in the coins since they had a $5 face value. It seemed that buying the coin was like purchasing silver with a put option attached to it. The analyst explained that the legal tender status of the coins had the purpose of avoiding certain excise taxes when the coins crossed international borders, but it did not mean that the coins would be accepted at face value by Canadian banks if silver dropped below $5 in price.

 

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Only Government bureaucracy at its finest! Wouldn't be nice for some kind of notice or disclamer somewhere. Constitutional and Administrative law getting mixed up somewhere!

 

I was just informed that our Buffelo is dead! Say it is not so!!

 

I remember the case you speak of. Some business was paying his employees with silver eagles, which have a $1 face value. He was issuing them to his employees at their bullion value though. Then when it came tax time, he only indicated the face value of money earned. I don't remember the outcome, but he might be serving jail time for that stunt.

 

Yeah the IRS brought the full force of the federal law enforcement down on him. They can't let this sort of thing happen as this would establish another currency to compete against the Federal Reserve as there was in here in the USA prior to 1933. Now interestingly enough if you take your $50 face value gold coin, which is legal tender, then the IRS will gladly accept it for at face value for payment of taxes. If however you receive this gold coin as payment for something, the IRS considers that you received the gold value as income, not the face value.

It's this sort of legal inconsistency that ought to tell you about the entire Federal Reserve system in the USA.