Guest Post: One Very Strange Use For Silver Coins

Tyler Durden's picture

From Simon Black of Sovereign Man

One Very Strange Use For Silver Coins

“Corruptissima republica plurimae leges. [The more numerous the laws, the more corrupt the state.]“ -Tacitus, the Annals ca. AD 69

The nature of what is ‘legal’ has become a truly bizarre concept these days. Developed nations of the west have hundreds of thousands of pages of rules, codes, regulations, laws, decrees, executive orders, etc., many of which are contradictory, archaic, and incomprehensible.

Across these ‘free’ nations, the law is selectively enforced, selectively applied, and completely set aside whenever it pleases the state. As such, even the most harmless of activities (operating a lemonade stand, collecting rainwater, etc.) can be cast as illegal… while the direct theft of people’s wealth through taxes and manipulation of the currency is considered legal.

There is no morality anymore in the law. And even still, whatever few activities may still be considered ‘legal’ are subject to consequences if the enforcers simply decide they don’t like it.

I have a good friend you might like to hear from on the subject; his name is Jake Lawless (an assumed pen name for reasons which will become obvious), and he is a bit of a master when it comes to skirting the line between what’s legal, and what they just don’t like.

In Jake’s words:

I’m a beneficiary of mortgage brokers who believed that housing prices would rise forever. The US real estate crash, plus high gas prices, forced a lot of people to sell their luxury vehicles… and the sudden glut caused prices to fall dramatically.

I didn’t think much about the market for pre-owned luxury cars until one day an engine fire from a cracked turbo manifold in my truck left me stranded. After a day’s search, I found a beautiful car for sale in Nevada, and the asking price was a fraction of the pre-crash peak.

I then contacted the dealer, wired a $500 deposit, and bought a ticket to Las Vegas… all after explaining that I wanted to purchase the vehicle with pre-1965 US quarters.

You may know that, before 1965, many US coins had a very high silver content. As such, they had intrinsic value… real worth, completely independent of “faith” or “because we decree it thus.”

I put roughly 4,000 of these quarters (~$1000 of face value) in a carry-on bag and headed to the airport. The quick math is this– 4,000 pre-1965 quarters contains 715 ounces of silver. At the time, silver was about $35/ounce, so 715 ounces was worth $25,000. In other words, every single quarter had a silver content worth about $6.25.

At the airport, I played my part in security theatre, dutifully removing my shoes after heaving my luggage onto the conveyor. There was a flurry of activity on other side of the x-ray machine. A crack TSA operative stormed up, indignant. “WHOA sir…I have to inspect your luggage.”

Mind you, there is no law against transporting 54 pounds (24.5 kg) of quarters onto an airplane, but that didn’t seem to matter. He just didn’t like it. The TSA guy opened my luggage to find a ziptied cloth bag labelled “$1000?.

“What’s this all about?”

“That’s a bag of quarters. I’m on my way to Vegas,” I said, showing my boarding pass. “I have a system for playing the slots.”

“Wow… will you go through all these?”

“Heck, no. I plan on coming back with even more. I told you, I’ve got a system. I can’t lose!”

“Can I cut the zip tie off and have a look?”

“I’d rather you didn’t, unless you have another zip tie…I don’t want 4000 quarters rolling all over the plane.”

TSA guy demurred. “Oh, ok. Well, good luck. Hope you win big!”

Upon arrival to Las Vegas, the dealer picked me up and drove us directly to a coin shop. I gave him the coins, around $1,000 in face value, and he handed them to the clerk who promptly issued a check for roughly $25,000 made out to the dealer.

It was a legitimate swap– $1,500 worth of legal tender changed hands (my $500 original deposit plus another roughly $1,000 in face value of the pre-1965 quarters), plus value-for-value was bartered between two grown adults.

I drove away with a bill of sale for $1,500, which I then submitted to my state DMV authorities as a basis for them charging me a vehicle tax. Frankly, I think this is highway robbery. Why my state has its hand out every time two individuals conduct a private transaction is beyond me.

But what can anyone do about it? Lobby the state legislature? Rock the vote? Protest… and hope we don’t get arrested, beaten, or shot by those sworn to protect and to serve? Give someone at the DMV a stern lecture about economic freedom?

Trying to change this system is a waste of resources. It’s a race that everyone will lose. Besides, you could spend your whole life lobbying to change one law, and by the time you succeed, they’ll have already passed another 10,000 new, even dumber laws.

Fact is, no one can do anything about this. Just like nobody can prevent Ben Bernanke from dropping money from helicopters. We can’t stop the price rises from monetary inflation, we can’t stop out of control spending (and theft) at all levels of government.

What we CAN do is take sensible steps to protect what’s ours… and then use their own stupid rules against them. It’s a much easier way to win.

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Lohn Jocke's picture

Does anyone else feel like Yukon Cornelius from Rudolph the red-nosed reindeer?

Gold! Silver! PEPPERMINT! MY BOYS WE'VE STRUCK A PEPPERMINT MINE!!

I guess anything is better than dollars.

Dalago's picture

Just because its illegal (some fuck face protecting their interests via laws) doesn't necessarily mean its wrong.  Right, honour and Liberty can be illegal.

Herd Redirection Committee's picture

Its the same old Sovereign Man article where he tells you not to 'waste your time' with political involvement, or even spreading the truth to those around you.  Yawn.

He already wrote a year ago that "trying to change the system is a terrible investment and a waste of your time".  Honestly, to me, leaving this world  a better place for future generations is the ONLY worthy cause in this life.  Just don't expect Simon Black to agree, he is too busy selling advice.  Since he doesn't have any advice on how to change things for the better he thinks everyone should just "go with the flow".

"If you can't beat 'em, join 'em", ain't that right, Mr Black?  Defeatist much?

ndotken's picture

This transaction is illegal..  The dealership accepted a check for $25,000 in payment for the car, but issued a bill of sale for only $1,500.  The dealer will record a loss, thereby reducing its taxable income.  That's called tax evasion.  Or if the dealership records the transaction properly and shows a profit, then the buyer is committing tax evasion by underreporting the amount of the sale.  Either way, the IRS or the state revenue department has a pretty strong case.  Good luck in tax court Mr. Lawless.

pods's picture

It is the same thing the guy in Nevada? got popped for. He paid employees in gold at face value, but used gold content value for another accounting measure.

You cannot do both. 

pods

greased up deaf guy's picture

color me disappointed. i was sooooooo hoping this was another one of simon's anecdotes about him galavanting through some eastern bloc country telling us how much better things are there. lol

Thomas's picture

Courts have already ruled on this ploy. It's a no go legally.

Dr Benway's picture

Simon Black is Wesley Snipes' tax advisor. Amazingly poor advice as always.

Bicycle Repairman's picture

I now know how to turn it all around: Rock the vote!!

The Alarmist's picture

Them thar full body scanners are there for a reason, and I doubt it is air safety.

Overflow-admin's picture

Yeah, people noticed and maybe in some years they will throw out the court if it doesn't change his mind.

Dimeboy's picture

Ontario's DMV checks the VIN against the Blue Book value, and if it's under by much, they ignore the bill of sale price (yes even a Dealers) and charge the tax against the book value.  Otherwise everyone would just charge their buddy a buck on paper.  The only exception is if it's a wreck, and then, why do you need registration if you have ownership and can't drive it.  You have to pay the fee and then claim back the difference with proof that you rehabbed the wreck to driving condition.

ATM's picture

I don't think so. The dealership accepted $1500 dollars in exchange for the car. They then sold their $1000 of coins for $25,000 in fiat.

The dealer lost on the car but also took a corresponding gain on the sale of the coins. To the dealer it should be a wash. The only loser is the tax man.

Overflow-admin's picture

I prefer qualifying this operation as BLOWBACK BITCHEZ! Legal, illegal... it's just WORDS.

 

I.E. Buy a machine tax free as a reseller (but to use it first!). If you sell it, and your buyer will also resell it, tax free. What's your problem here?

 

In Argentina, the VAT is 20%, but the gov gives a 5% VAT reduction as incentive to apply it. IS THE VAT 20% OR 15%? IS THIS LEGAL OR NOT? Food for toughts

CrazyCooter's picture

Um, seriously? So, the TSA, if they had three brain cells, would realize quarters could be obtained anywhere from a bank, thus making the story highly suspicious. Think about it, take 1k in cash, go to the casino, get the quarters. This "I have a system" stuff is just nonsense. This would get the average citizen a cavity search.

I seriously doubt I would try that shit with the TSA! Transporting bullion is a HUGE problem, particularly with the state of affairs these days.

Personally, when states start passing gold/silver laws (e.g. Utah), I am getting a safe deposit box in said state and part of my stash goes there with a small funded account to keep the box paid for for 10 years. If I need to cash out, I can visit, do all my business in the bank (if it's legal per state law, the bank will buy/sell bullion I figure for a fee), then use my cash however. No TSA or dealers or transportation of metals involved.

Regards,

Cooter

Peter Pan's picture

There is a flaw in this transaction. While the purchase of the vehicle may have been legitimate , the sale to the coin dealer may strictly speaking be subject to capital gains tax.

SafelyGraze's picture

if you "buy" 1k face in coins for 20k in FRnotes, then "sell" them for 30k, there's your 10k in so-called capitular gainship. unless, you know, enough people friend the FreeComCur act.

http://www.facebook.com/CompetitionInCurrency

the better thing to do, obviously, is to lend them to a third party but keep them on the books to use as collateral against a loan which you then lend against real assets and then sell shares of those loans to pension funds while you simultaneously claim ownership of all those assets.

even better thing to do, obviously, is to use the mere idea of them as collateral against a loan, then blah blah blah (see above). then coerce congress to give you a shit ton of money, then threaten the world with starvation and death.

then you can have all the cars you want. paid to you as tribute.

 

Overflow-admin's picture

Awesome resume and context (not CONtext)

HeliBen's picture

I work for a bullion/jewelry company where we often transport bullion to and from locations by plane through TSA, it is no big deal.

Most people do not even know what they are looking at, and think bullion is some sort of soup.

DoChenRollingBearing's picture

I have taken gold out of the USA twice before.  Once the actual value (Gold Eagles) was over $10,000, so I had to fill out the Customs Form.  Note!  The actual value of the gold, NOT the legal tender value ($50 each).  I had to declare that I was taking the gold out (just as I would have had it been cash).

The other time I took out a much smaller amount, under $10,000, so did not declare it.  In neither case did TSA even blink.

akak's picture

DoChen, I am not denying what you did or were told to do, but if any US Customs agent told you that you had to declare the MARKET VALUE of your gold coins, not their face value, they were flat-out wrong.  US Customs, on their very own website (and in information I have read elsewhere), state in no uncertain terms that gold bullion is NOT a monetary asset, and does NOT need to be declared upon leaving the USA, except in cases where the face value of legal tender coins were to exceed $10,000 (which would be a HUGE amount of gold!).

As I have stated elsewhere, people traveling with expensive jewelry, or rare artifacts, or artwork, do NOT need to declare those items either, so it would make no sense on the face of it to have to declare the market value of your gold either.

SafelyGraze's picture

had to read the article twice to find the "very strange use for silver coins"

it's here: 

"I gave him the coins, around $1,000 [of silver] in face value, and he handed them to the clerk who promptly issued a check for roughly $25,000 [in FR notes] made out to the dealer."

that's a strange use for silver! he could have bought a car instead.

Get the Borrow's picture

Whoa somebody owes capital gains tax on this transaction...Dealer maybe should 1099 quarter doofus?  Minus 500?

Peter Pan's picture

Sorry, just saw your comment.

IndicaTive's picture

Actually, that's my Holiday avatar. You'll see it on Thanksgiving....through the New Year.

kaiserhoff's picture

 I like this financial innovation stuff, but what did he achieve except saving some sales tax, and jerking the chain of the TSA (always fun)?

mkhs's picture

California registration is based on purchase price.

kaiserhoff's picture

How much in total fees?

tickhound's picture

...saving some sales tax, gifting fewer $ to government, jerking the inflationary monetary chain = one small step for man...

Mad Mohel's picture

He did a great job of proving what's real money and what's on it's way to 0.

dark pools of soros's picture

yeah, did he wire $500 in silver too?

 

 

 

 

markmotive's picture

Some are making a case for $960 silver?!? Not sure if this is realistic.

 

jmcadg's picture

Yeah, that's the old case. The new case is $4000 upwards. Keep up.

The Shootist's picture

Don't you know he's a terrorist?! That guy should go to Gitmo with all the US troops who shoot at Afghanis trying to kill them.

e_goldstein's picture

Last I read, he is free. Our benevolent masters thought that bankrupting him and shutting down his business was enough punishment.

 

redpill's picture

He used to have a blog with updates, but I think it got shut down due to some bogus court order.

ultraticum's picture

Plus on the comment - and the Alpo handle sums up how we should treat Mittens Romney's entire constituency perfectly.  Thank you for brightening my day.

A Lunatic's picture

And then waste it on a luxury car...........

Death and Gravity's picture

Taxation is not theft. Since it happens with either use of force, or implied threatening use of force and/or harrasment towards unwilling subjects, it is robbery.

JLee2027's picture

Damn! I missed your last sentence and almost gave you a down arrow. Brilliant post.

redpill's picture

Good point, but imho it's worse than that.  Money is a exchangable-representation of our labor over time, so when that gets seized by force it's not just robbery, it's enslavement.  In the end, people are required to labor for the government without compensation and without choice, under threat of force.

It's one more supporting argument for the repeal of the 16th amendment and replacing the income tax with a simple point-of-sale tax on new retail goods and services only.  While I detest federal taxation in all its forms, this would at least put choice into the hands of the payer, a decision for how/when they will pay tax, and a transparent communication of exactly how much that tax truly is.

 

Dalago's picture

And EVERYone will pay into the system.  Illegals and legals, on the table and under the table incomes.