Keep Your Gold Coins
Last year's correction in the price of gold upset a lot of people. Those who bought in during the speculative run-up during the late summer, when gold peaked over 1900 watched the price sink into the 1500s. Many sold out.
Worse, though, were some long-term investors who panicked. Some of them - who already had significant gains - sold too. While there's nothing wrong with taking gains, it's usually a bad idea in the sort of primary bull market we've had in gold. When do you buy in again? I certainly don't know how to trade that way.
But if you've got gold coins, and didn't panic, there's some interesting news developing. Some states are considering legislation that would make gold and silver coins a recognized currency.
The Constitution bans states from issuing their own paper currency, but it does allow states to make "gold and silver Coin a Tender in Payment of Debts." There's the wisdom of our Founding Fathers at work. They didn't trust paper money, and they certainly didn't want to entrust states with the power to issue it. On the other hand, they understood that gold and silver were money, and so they allowed states to use such coins as money as well.
If you read the article published on CNN Money, you can get more details of exactly which states are considering this, along with some interesting facts and commentary.
I don't want to repeat what's published there, but at the end of the article, you'll find some comments by professor David Parsely. He completely misunderstands the issues involved here. But the silliest thing he says is that we don't want to be dealing with "50 Feds" The whole point of using gold and silver coins as money is that there's no need for the Fed. In fact, some of the states specifically point out that their concern with how the Fed has debased our currency, along with a fear that the U.S. dollar could collapse in value at some point, thereby disrupting normal commerce, has led them to consider the use of gold and silver coins so that there would be usable currency in the event of such a collapse.
While I don't know the professor, his remarks strike me as those of a typical academic economist who has no understanding of money or the real world. Ignore them. But keep your gold coins.
Worse, though, were some long-term investors who panicked. Some of them - who already had significant gains - sold too. While there's nothing wrong with taking gains, it's usually a bad idea in the sort of primary bull market we've had in gold. When do you buy in again? I certainly don't know how to trade that way.
But if you've got gold coins, and didn't panic, there's some interesting news developing. Some states are considering legislation that would make gold and silver coins a recognized currency.
The Constitution bans states from issuing their own paper currency, but it does allow states to make "gold and silver Coin a Tender in Payment of Debts." There's the wisdom of our Founding Fathers at work. They didn't trust paper money, and they certainly didn't want to entrust states with the power to issue it. On the other hand, they understood that gold and silver were money, and so they allowed states to use such coins as money as well.
If you read the article published on CNN Money, you can get more details of exactly which states are considering this, along with some interesting facts and commentary.
I don't want to repeat what's published there, but at the end of the article, you'll find some comments by professor David Parsely. He completely misunderstands the issues involved here. But the silliest thing he says is that we don't want to be dealing with "50 Feds" The whole point of using gold and silver coins as money is that there's no need for the Fed. In fact, some of the states specifically point out that their concern with how the Fed has debased our currency, along with a fear that the U.S. dollar could collapse in value at some point, thereby disrupting normal commerce, has led them to consider the use of gold and silver coins so that there would be usable currency in the event of such a collapse.
While I don't know the professor, his remarks strike me as those of a typical academic economist who has no understanding of money or the real world. Ignore them. But keep your gold coins.
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