Warning to Precious Metal Dealers and Interested PM buyers

Beginning in 2012, I suggest you start buying your PMs in $599 increments.  The Obama administration slid another little surprise by us in their Health Care Law. The passage of the national health care legislation by Congress will have a big impact to the Nation’s coin collectors, silver and gold dealers, or anyone else who buys and sells coins, or silver and gold bullion.

Effective Jan. 1, 2012, the Internal Revenue Service will require that 1099 tax forms will be required for all transactions involving coins and PMs  that are bought or sold in excess of $600. The arbitrary $600 or more number (I believe that is the same number at which a casino’s IRS agent takes their share of your winnings, on the spot), is not a very high level and one that has already started sounding alarm bells. It doesn’t matter in what form payment is made; cash, check, credit card, or PayPal, the $600 threshold still applies.

IRS Form 1099 is used to report independent contractor income, income from dividends, and income from many other sources.  It is kind of a catch-all form to collect taxes on income received but not specified on other forms.


Section 9006 of the Patient Protection and Affordable Care Act (Public Law 111-148) that was signed into law by President Obama this spring, is where you will find the relevant part. Look under “SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS. (a) IN GENERAL. – This is where Section 6041 of the Internal Revenue Code of 1986 is amended to require a 1099 issued for any transaction of coins and bullion in excess of $600.

The old exemption against corporations is also gone. If you buy or sell more than $600 of coins, or whatever, from, to or with a bullion dealer, for example, you have an obligation under the new law to issue 1099s.

On the hopeful side, there is a bill being introduced, H.R. 5141, by Rep. Dan Lungren , that has gathered over 80 members of Congress as co-sponsors to repeal this section of the Obama administration’s Universal Health Care farce . However, the drafters of the initial provision believe there is a $17 billion loophole that the requirement plugs.

Call or write a letter to your representative and urge everyone you know who invests in, purchases, sells, or collects silver or gold coins and bullion, expressing your outrage at this sneaky, underhanded tactic utilized by the Obama administration to pay for a Health Care Law that we did not want in the first place.  Hopefully dealers, collectors, investors, and the public at larges cry of outrage will lead to a ready modification before the law becomes operational in 2012. Potions of this article were taken fro NumisMaster.com and Numismatic News.

Detailed Explanation to a Good Question from "The Golden Truth"

One of the blogs I follow, The Golden Truth, received a comment in the form of a question today.  I thought it should be shared, and I hope Dave does not mind.

The comment:
Dave,
Any thoughts as to why gold and silver have been moving in opposite directions to each other the last couple of days?

Dave's reply:
Good question. Primarily because this is what is known as "roll" week in the futures market. The last day you can hold May silver contracts is tomorrow, unless you fully fund your account for delivery. Since most long positions are speculative funds who have no intention of taking delivery, there is usually heavy selling in the week prior to "first notice" which is this Friday.

Typically the gold/silver manipulators (JPM, HSBC, GS, etc) will try to force the market lower during "roll" week, because they know they have a large amount of natural sellers. In fact, it can be argued that silver is performing much better than usual right now and I think because it seems that a large number of the longs are rolling forward to the next front-month, which is silver. Typically in the past, on a day like today during roll week when you wake up and silver is getting hammered, it just stays down. Silver has been bouncing back all during the last trading week.

The Golden Truth can be accessed at: http://truthingold.blogspot.com/
Go there and read today's post: Physical Gold Buying vs Paper Fraud

In it Dave states "It is becoming more readily apparent to anyone observing and participating in the trading/investing of gold and silver that the physical market is beginning to overwhelm the fraudulent, fractional bullion practices of the Big Wall Street Banks. This is a scandal that ultimately looms much larger than anyone realizes and will take gold and silver to prices that will shock even astute, long-time precious metals market participants."

The Most Dangerous Man in the Mid South: The-moneychanger.com

I cannot take credit for finding this unbelievable article.  Kirsty Hogg, author of Gold Wars gave me the reference. This article should be required reading for anyone who barters or is thinking of bartering with PMs.  Since there is a demand for such legalized bartering, or paying for goods and services with silver and gold, everyone should read what happened to this man when he tried to do that very thing.   The article is entitled "The Most Dangerous Man in the Mid South?" and can be found at the-moneychanger.com/articles_files/dangerous.phtml.

The Glitter of Precious-Metals ETFs - Kiplinger.com

By Laura Cohn, Associate Editor, Kiplinger's Personal Finance


Published February 4, 2010

In this article Ms. Cohn identifies five exchange-traded funds that give investors a stake in gold, silver, platinum and palladium. Unfortunately she leaves out my favorite, SIVR, an ETF that tracks the spot price of silver. When silver went below $16.00 and ounce I started buying shares in SIVR, paying as low as 15.35/share. You can buy it through your online broker just like stocks, I paid $4.50 per trade, no other fees. I prefer to hold physical silver which I also bought today, but the ETF shares I bought with OPM (other people’s money). Yes, I bought on margin. I believe this is a temporary dip and when the price increases I will sell. I never hold paper silver very long, and frankly I have never had to. Anyway this is not my article so read on.

"For decades, gold bugs have argued the bullish case for their favorite metal. In recent years, they’ve actually been right. The price of gold has climbed steadily for the past nine years, from $277 an ounce in 2001 to a record high (not adjusted for inflation) of $1,213 in December 2009 as investors piled into the yellow metal because of its reputation as a safe haven and as a hedge against a falling dollar. Gold closed at $1,115 on February 2.

The rising price and the rise of exchange-traded funds have attracted investors in droves. Thanks to ETFs, investors can buy gold without having to open their own Fort Knox. Last year, investors around the world bought 51.2 million ounces of gold, and 35% of that amount came through ETFs. In the case of silver, the figure is even more astounding. Investors snatched up 172 million ounces of silver last year, and 87% of it was via ETFs. Silver closed February 2 at $17 an ounce, well below the record of $50, set in 1980, but far above the $5 level of recent years.

The best way to get a piece silver, buy the iShares Silver Trust (SLV), which charges 0.50% per year. Both GLD and SLV provide a stake in the metals, which are housed in vaults located in London. That way you don’t need to buy bars and worry about where to store them safely."
To read the entire article go here.

Phoenix Investment Conference and Silver Summit

Come one, come all! The important thing is that you come! I’m talking about the Phoenix Investment Conference and Silver Summit on February 4 and 5, 2010. That’s a few days from now and I hope it’s not too late to invite you to this event. A friend of mine and author of  SilverStockReport.com, Jason Hommel will be speaking on the 4th just in case you wanted to hear him talk about our favorite topic – Silver and Gold.   It should be a very eventful 4+ hours. So again, I strongly encourage you to at least check it out. It’s always a good experience to attend these kinds of shows. It helps give us a chance to check out different perspectives and maybe learn a few things. The summit webpage can be viewed here.

A Very Good Reason To Hold Silver and Gold

Federal Deficit in the Danger Zone - Kiplinger.com
As federal spending continues to rise, a crushing mountain of debt looms.
Posted using ShareThis

Better stock up on silver now!

Gold Price Pounded by Dollar

Publish on TheStreet.com by Alix Steel
December 23, 2010 8:55am EST

The US dollar index hit a 3.5 month high on Tuesday. This pushed Gold prices under $1.100/oz. Currently the US dollar is losing some ground, falling .25% to $78.11, while Gold was flat at $1,087/oz, but volatility is expected to continue into 2010 on light volume and more long selling. James Moore, analyst at thebulliondesk.com was quoted as stating "In the run-up to year end, we expect Gold to see further pockets of long liquidation, potentially pulling back to the $1,050 area", To read the entire article go here. Check out TheStreet for the latest stock market news and finacial investment headlines.

We Pay $$$ for Silver and Gold

We Pay $$$ for Silver and Gold

This Ad is posted on Corkin.com. Never heard of them before today but apparently an new online community.

Prediction: Silver at $35/oz. within 2 years

Dr. Michael Berry, former Wheat First Professor of Investments at James Madison University and an Assistant Professor of Business Administration at The University of Virginia, wrote an article on gold prices published on Forbes.com November 21, 2009. The article was primarily about the price of gold; however, he had some interesting things to say about the price of silver. Silver interests me more because I can afford to buy silver and I think it is undervalued compared to gold.

Dr. Berry has been a strong advocate of holding both gold and silver during times of economic turmoil, and that is why you must still hold core positions in gold and silver now. He stated n the piece, "The steep decline in the dollar after March 2009 appears likely to continue under the lavish spending plans of this Administration and Congress. As long as Washington attempts to print its way out of its debt-induced predicament and the Obama Administration and Speaker Pelosi’s House are determined to run multi-trillion-dollar deficits for universal health care, these scenarios are likely":

"Gold will appreciate over the next two years toward the $1500 mark.

Silver, which in his view, is particularly undervalued will appreciate toward $35.

The current eight-month bear market equity rally will stall, and

Asia, and particularly Chinese citizens, will seek safety in a dollar-for-gold and silver trade."

To read the entire article go to: http://www.forbes.com/2009/10/21/gold-bull-run-markets-commodities-michael-berry.html?

Gold Is Not Just An Inflation Hedge

In an article on Forbes.com written by Heather Struck, she postulates that that the market for the gold has changed of late. Although, much of the recent rise in the price of gold is a response to the weak dollar and to investor as well as public concerns about long-term inflation; central banks around the world are adding gold to their reserves. .

In her opinion, the bull market in gold could endure even if inflation never emerges and even if the dollar strengthens, because central banks around the world are using gold as a back-up reserve currency. She cites Daniel Brebner, a research analyst at Deutsche Bank, who concurs. He believes that the more gold the central banks accumulate, the more they will support its price. According to Brebner, Central banks are looking at gold differently. Primarily due to fears over the repayment of U.S. debt to foreign bondholders with an increasingly devalued dollar.

Read the entire article at http://www.forbes.com/2009/11/18/gold-dollar-euro-markets-commodities-inflation.