On June 28th, a trio of senators introduced the Sound Money Promotion Act, which would treat legal tender gold and silver coins (i.e. U.S. Gold Eagles, U.S. Silver Eagles) the same as U.S. currency in regard to taxes.
Currently, 13 states recognize gold and silver coins as legal tender but those coins are currently taxed as if they are not U.S. currency.
“This measure would encourage the adoption of sound money measures, and that’s a step in the right direction,” according to a press release from one of the bill’s main sponsors, Sen. Jim DeMint of South Carolina.
Utah was the first state to pass measures recognizing gold and silver coins as legal tender. Since adopting the measure this past May, 12 other states have followed suit, including DeMint’s home state.
Another one of the bill’s sponsors, Sen. Mike Lee of Utah comments “Good monetary policy is an important part of a healthy and prosperous economy. Since the Federal Reserve Act of 1913, the dollar has lost approximately 98 percent of its value. This bill is an important step towards a stable and sound currency whose value is protected from the Fed’s printing press.”
Sen. Rand Paul of Kentucky is the bill’s other primary sponsor.
With the debt ceiling deadline looming, this bill is certainly going to receive little attention in the upcoming weeks.
However, we strongly agree with the senators and hope the Congress considers this important legislation. Sen. Lee is especially correct in saying the dollar has lost 98% of its value since the inception of the Federal Reserve nearly 100 years ago.
The importance of legislation like this cannot be overstated. The S&P recently downgraded the outlook for the U.S. from ‘stable’ to ‘negative.’ The Federal Reserve is now buying 70% of all U.S. Treasuries, further devaluing the dollar.
Gold and silver coins help protect the value of your wealth from this kind of devaluation, which allows the government to spend money at will without any limitation. This in turn devalues the money sitting in your bank account and wallet through higher prices.
Anyone who shops can tell you about higher prices.
Ask any older person and they’ll tell you about the days when you could get a candy bar for a nickel or a coke for a dime. Each of those items today cost upwards of a $1 or more.
We’ll keep you updated on any further developments with this legislation.
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