Money Wise

Trading Your Paycheck for a Coin Purse


October 16, 2007

Trading Your Paycheck for a Coin Purse
by The Mogambo Guru

"The damned government has now ruined the money so badly that the little bit of metal in the old coins is now worth more than the face value of the coin, but the government can't wiggle out of paying for their sins by letting people not pay...taxes!"

JMR Arlo S. was cheery as he sent a link to, whereupon one learns that somebody has figured out how to beat the inflationary destruction of the money by the actions and inactions by the Lying, Cheating Government (LCG) and the Lying, Cheating Federal Reserve (LCFR): Use old coins!

The headline was, "IRS Suffers Staggering Defeat". In short, the guy paid his employees with old silver dimes, silver dollars and old gold U.S. coins according to their face value. Thus, he could pay his workers with silver dimes, silver quarters, silver dollars and gold coins, and thus the employee made so little money (according to the face value of the coins) that they fell below minimum income reporting thresholds, and thus no income tax was due.

Mr. Rense explains, "In other words, if a worker is paid with such coins, his taxable 'income' (if any) can only be the face value indicated upon the coin money paid - i.e., $1.00 for a circulating silver dollar or $50 for a circulating gold U.S. coin."

The government, on the other hand, argued that the market value of those coins made them very valuable, and thus the employees owed taxes on the true value of their coins, not the paltry pittance of the face value. The IRS argued that, "Obviously, a $20 coin made of gold is worth at least $750, which is the market price of gold!"

So, "The essence of the argument is that under the Constitution, Congress is obligated by law to mint and circulate such coins as demand requires, and must establish the value of coins as they are used as legal tender, but the coins' market value, arising as valuable personal 'property,' is a distinct, separate attribute of such coins, and is of no legal consequence if the coins are used as legal tender." Hahaha! Fabulous!

The first Supreme Court argument underpinning the defendant's case was Ling Su Fan v. U.S. in 1910, which "establishes the legal distinction of a coin bearing the 'impress' of the sovereign: 'These limitations are due to the fact that public law gives to such coinage a value which does not attach as a mere consequence of intrinsic value. Their quality as a legal tender is an attribute of law aside from their bullion value. They bear, therefore, the impress of sovereign power which fixes value and authorizes their use in exchange.'"

If that was not enough, the second pillar of the defendant's argument is Thompson v. Butler from 1877, which, "establishes that the law makes no legal distinction between the values of coin and paper money used as legal tender: A coin dollar is worth no more for the purposes of tender in payment of an ordinary debt than a note dollar. The law has not made the note a standard of value any more than coin. It is true that in the market, as an article of merchandise, one is of greater value than the other; but as money, that is to say, as a medium of exchange, the law knows no difference between them."

Hahaha! The damned government has now ruined the money so badly that the little bit of metal in the old coins is now worth more than the face value of the coin, but the government can't wiggle out of paying for their sins by letting people not pay confiscatory income taxes! The government and the IRS are required to honor the face value of the coins! This is too, too fabulous!

But the most interesting part, mostly because I love to read it over and over, comes at the end, where we are reminded that "In 2005, the Ninth Circuit Court of Appeals refused to overturn a previous District Court ruling holding that the federal prosecutor is not entitled to absolute immunity for the unlawful raid."

Therefore, "In March 2007, the primary defendant, Bob Kahre, filed a federal civil rights lawsuit against the prosecutor and IRS agents who had conducted what he alleges to be an unlawful search and seizure raid"! Hahaha! Go get 'em, Bob!

Okay, that is old news, but still somehow comforting to know that I can use this as a club to beat the hell out of any public employee who does me harm without the legal authority to do so.

Mr. Rense is not interested in my reveling in the happy prospect of suing rambunctious government employees and retiring in luxury on the settlement, and says that the cover-up is the real story, as he reports that, "To this day, with exception of the single article by the Review Journal, no major media entity has published a news story regarding the outcome of this important federal criminal tax case."

And little wonder, eh? Since when were the news media and the school system NOT a couple of whores for the government? Hahahaha! Ugh.

Mogambo sez: I figure that the insiders, who are massively short, are colluding to manipulate the prices of gold, silver and oil down, only to let them rise, so that they can profit, not just with bets covering the guaranteed inflationary rise in prices thanks to central banks dangerously expanding the money supplies, but also on spread bets in the futures markets as they make the spreads widen and narrow.

You know they have to do it, you know they want to do it, you know that they are doing it, so you know it's coming, and so you know you can make money trading them as they reach extremes in the trend, or just constantly buying at the low prices after the manipulated pullbacks. What a wonderful world!

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Richard Daughty, the angriest guy in economics
The Mogambo Guru

Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.

The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications.