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To: Secret Agent Man
We cannot exchange federal reserve notes for gold or silver.

Technically, thanks to Ronald Reagan you can, and that gold and silver is legal tender. The Gold Bullion Act of 1985 authorized the mint to resume producing gold coins as an opportunity for currency competition. The US Gold American Eagles are legal tender at face value. The case of Thompson v. Butler established that the law makes no legal distinction between the values of coin and paper money used as legal tender. The public never really latched on to using these gold coins and they are mostly just produced for investors or collectors. The market really has decided on this and the currency backed by the full faith and credit of the United States is more appealing than The US American Eagle gold coin. Still, you have a choice.

As for the taxation part, you do have a point in that interest imposed by the government is essentially a tax.

2 posted on 09/04/2008 12:09:50 PM PDT by mnehring
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To: mnehrling
The market really has decided on this and the currency backed by the full faith and credit of the United States is more appealing than The US American Eagle gold coin.

Sorry but the market has never been given that chance. Fluctuations in the value of gold holdings are counted as income for tax purposes. So no, you can't use gold as a currency.

6 posted on 09/04/2008 12:15:47 PM PDT by SeeSharp
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To: mnehrling
Your description of things is a little misleading.

The market really has decided on this and the currency backed by the full faith and credit of the United States is more appealing than The US American Eagle gold coin. Still, you have a choice

The face value of a 1oz Gold Eagle is $20. Currently they cost about $800. That's not really a practical medium of exchange at face value, given that huge disparity.

I believe there was one fellow in Southern California who paid his staff in gold coins and declared only the face value of the coins as income for the. (So you paid someone $100 a month on the books, but paid them in coins worth $4000. He didn't do well in his encounter with the IRS, however he does now have rent-free housing!)

13 posted on 09/04/2008 1:26:40 PM PDT by Jack Black
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