Merchants accepting silver/gold for payment?

[Betho]

Hey guys!

My research is not panning out online so I thought I would check here.

I recently found out that Backwoods Home is accepting silver for payment - what a wonderful idea and especially the STATEMENT it makes.

I am a business owner as well and so it made me curious about what if I as a business owner began accepting silver coin as payment as well. However someone had told me I could get in legal trouble for it?

The way I see it is that silver coin would be equivalent to barter, which afaik is still legal as long as I still track it and pay the appropriate taxes.

I tried to find more info online about other merchants making a similar movie but couldn't find much besides spammy stuff.

Does anyone have any input on this? I sell mostly online with a store of my own and I have no idea how I might implement it (though I love how BWH does it)... but honestly even if no one ever bought from me in silver I still would feel like it is a good statement to make.

[pancho]

Why would anyone with silver choose to spend it at this time? Silver is going up, the dollar is going down. Why spend something that will gain value and keep something that is decreasing in value to get the same product?

[dlmcafee]

I think this is how the IRS would get you. You would need to value the item you took as payment at the fair market value on the date of the completed transaction, now if you hold that item (the payment, ie: silver at near $30 an oz) it becomes part of your assets and would be valued at the fair market value at the end of the tax period. So you took $30 in silver as a payment on an item and held that silver, would it be considered an investment and taxed at maybe higher value then you initially paid for it?, I bet it would, but not so sure.

I like the idea though myself, good luck finding the answers

[Jim-mi]

Any and all who would be excepting silver in payment 'right now', you can darn well bet they are tucking it safely away.

Any who would make payment 'right now' in silver is-----goofy---.
(Thats putting it mildly)

just my not so humble opinion...................

[hippygirl]

I have quite a bit of silver, both silver sheet that I bought when the ppo was less than $10 and coin. While I do make the occasional piece of silver jewelry (mostly for the love of the craft), I'm holding on to my silver coin.

[Betho]

ok just for the record (lol) I also agree that anyone who bought physical goods with silver right now is NOT using their investments wisely... it is more the STATEMENT that I would like to make. I myself am certainly not going to buy anything with my appreciating silver as opposed to my depreciating paper dollars.

Realistically, I can't expect Backwoods Home to be getting many subscriptions paid for in silver, and I also wouldn't as an etailer (especially since my customers are not particularly "homesteady") but again... it's the statement that I like, agree with, and would like to make myself.

I may just check with the editor at BWH and see how they did it... thanks for the helpful post dlm

[ryanthomas]

There's a guy named George Gordon who only accepts gold coins, and doesn't pay any taxes because his income is only the face value of the coins, even though the $1 coins are actually worth over $1,000. He's kind of out there, but interesting if you have the time to listen to his radio shows on his website. He claims the IRS has come after him and he has won in court. Not quite what you were asking about, but similar.

http://library.georgegordon.com/

[silverbackMP]

Originally Posted by ryanthomas

There's a guy named George Gordon who only accepts gold coins, and doesn't pay any taxes because his income is only the face value of the coins, even though the $1 coins are actually worth over $1,000. He's kind of out there, but interesting if you have the time to listen to his radio shows on his website. He claims the IRS has come after him and he has won in court. Not quite what you were asking about, but similar.

http://library.georgegordon.com/

There has been more than one that lost in court doing this. I don't feel like looking up the details but I do remember a few years ago an employeer paying with US gold coins at face value and he got nailed by the IRS (and upheld by the courts). I think I read the story at GIM 1 which no longer exists but it was a link from another site so it still should be out there.

[TnAndy]

Actually, he was found not guilty or they hung all all charges.

The govt's position was he had to use the intrinsic value of the gold, not the face amount on the US coin ( this would only work with US coin ).

The defense argument was "ok...if we have to use the intrinsic value of a US minted coin, then we should be able to use the intrinsic value of a US printed note as well.....you can't have a double standard for money ISSUED BY THE US GOVT".

The intrinsic value of a US printed note is about nothing.

Valid argument, and the jury agreed.

[silverbackMP]

Originally Posted by TnAndy

Actually, he was found not guilty or they hung all all charges.

The govt's position was he had to use the intrinsic value of the gold, not the face amount on the US coin ( this would only work with US coin ).

The defense argument was "ok...if we have to use the intrinsic value of a US minted coin, then we should be able to use the intrinsic value of a US printed note as well.....you can't have a double standard for money ISSUED BY THE US GOVT".

The intrinsic value of a US printed note is about nothing.

Valid argument, and the jury agreed.

I'll be danged...I guess my memory is faulty.

[Trixie]

I totally do not understand the idea of buying gold and silver. The fact it is increasing in value and would be a good investment makes sense, but I don't understand about having it when the bottom falls out.

Now, maybe people are out of money and using their silver - but why would they pay merchants with it if it's worth more than face value? Wouldn't it be better for them to sell it for it's worth and then buy what they want.

[Betho]

Trixie - if a merchant were to accept silver for payment they would most likely (myself included if I do this) do a conversion. For instance, my cups are $13.99, which roughly translates to $.66 in face value of silver coin.

If I as a merchant were to make this decision to accept silver coin I would probably have to throw in an extra item and then ask for $.70 in silver coins. I'd probably also have to go in and check on a daily basis to see if I had to make an adjustment there. BWH has a tier where someone can pay a certain amount in face value of the silver coins for the subscription depending on how many years.

As far as having silver when the bottom falls out... the bottom is very unlikely to ever fall out with a precious metal. Yes, prices will go down and up and down etc, but the truth of the matter is that precious metals have retained their value for thousands of years... they aren't going to become worthless anytime soon.

You won't see a crash of the silver & gold market the way we did with the stock market unless we discover that the moon has bazillions of tons of gold or silver on it and supply dramatically exceeds demand. But then again they would probably control supply to keep demand high the way they do with diamonds.

Some people like to have silver coin so that if their cash does become worthless (see this blog post about inflation) they have something they can use that has actual value as opposed to bricks of worthless paper money. I personally like silver coin to use as an investment because it is a hedge against inflation (and is in units small enough to "spend" if that does become necessary), there is often a collector's value that values the coin higher than a regular silver coin, and of course the silver content itself.

Gold is also a great investment vehicle, it just might be harder to spend for a gallon of milk in a barter system

In any case - I guess my thing is this... I come from the banking world. Given what I've seen from within that world and also things that have happened economically, I have a HUGE problem with the fact that our money is not backed by anything. And I guess I am looking for a way for me, as just one person, to do my part in bringing a gold standard back. Besides voting for Ron Paul of course

[wolffeathers]

Here's a little bit of a random question. It may show ignorance on my part and I'm hesitant to ask, but if you never ask, you'll have a heck of a time learning.

I have always wondered what makes gold so valuable? Is it simply because that is what was 'picked' for the 'universal' currency?

I understand the gold and silver hold value, just wondered what gave it that value in the first place. Like I said, maybe I'm simply overlooking something or was never taught in the first place. I know that often we describe the value of gold in currency(dollars, etc) but isn't it the gold that gives the currency value?

If the SHTF, I can't imagine people would be clamoring for gold, unless someone else deemed gold valuable enough to trade for necessary resources. For example, royalty has gold that makes them wealthy and influential. But how does that gold bring them wealth? By trading to the peasants? What use to peasants have for gold? This is the only example I could think of. I guess it's why gold always seemed strange to me, because it's used to describe, but only unless it's deemed worthy does it really do any good. Someone has to want that gold in order for it to be worth something..

Just hoping maybe someone can clear that up for me(without being too condescending please )

[texican]

Originally Posted by wolffeathers

Here's a little bit of a random question. It may show ignorance on my part and I'm hesitant to ask, but if you never ask, you'll have a heck of a time learning.

I have always wondered what makes gold so valuable? Is it simply because that is what was 'picked' for the 'universal' currency?

I understand the gold and silver hold value, just wondered what gave it that value in the first place. Like I said, maybe I'm simply overlooking something or was never taught in the first place. I know that often we describe the value of gold in currency(dollars, etc) but isn't it the gold that gives the currency value?

If the SHTF, I can't imagine people would be clamoring for gold, unless someone else deemed gold valuable enough to trade for necessary resources. For example, royalty has gold that makes them wealthy and influential. But how does that gold bring them wealth? By trading to the peasants? What use to peasants have for gold? This is the only example I could think of. I guess it's why gold always seemed strange to me, because it's used to describe, but only unless it's deemed worthy does it really do any good. Someone has to want that gold in order for it to be worth something..

Just hoping maybe someone can clear that up for me(without being too condescending please )

If you scroll down to the Survival and Emergency Preparedness sub-forum, in the "Vault", there's a thread with six trillion posts on this subject.

Boils down to are you, in a real SHTF scenario, going to fight or fly... if you're going to fight till the death and die in place, gold/silver won't have any value, till the masses have died off, and a small scale commerce/barter starts to take place... otherwise, your several years worth of beans, bullets, and bandaids would be ideal. However, if you plan on flying (fleeing) from trouble, when the Golden Horde descends upon you, are you going to be able to get all your supplies on a dozen tractor trailer rigs? Doubtful. In this case, having a pound or two of gold, and several bags of silver, would be ideal......... as long as you flee to someplace where they still have plenty of beans, bullets, and bandaids...

Come on down to the "Dark Side"... at the S&EP subforum... we have cookies.

[wolffeathers]

Originally Posted by texican

Come on down to the "Dark Side"... at the S&EP subforum... we have cookies.

I like cookies, I'll be right down.

I'm hoping that the threads will explain gold and currency even when not in a zombie invasion.

Because even in today's market, I still wonder about it. Thanks for the suggestion, I'll be down there shortly.

[suitcase_sally]

Originally Posted by Betho

As far as having silver when the bottom falls out... the bottom is very unlikely to ever fall out with a precious metal.

Say, what???

Yes, prices will go down and up and down etc, but the truth of the matter is that precious metals have retained their value for thousands of years... You won't see a crash of the silver & gold market the way we did with the stock market...

Apparantly you weren't around in the 80's.

[Betho]

Originally Posted by suitcase_sally

Apparantly you weren't around in the 80's.

OK yes I was, though I was VERY young.

Allow me to restate this - it is unlikely that silver/gold will ever become worthless (which is what I think of when I hear "bottom dropped out"), and especially not permanently. Paper currency, however, can very easily become permanently worthless.

[ryanthomas]

Originally Posted by wolffeathers

Here's a little bit of a random question. It may show ignorance on my part and I'm hesitant to ask, but if you never ask, you'll have a heck of a time learning.

I have always wondered what makes gold so valuable? Is it simply because that is what was 'picked' for the 'universal' currency?

I understand the gold and silver hold value, just wondered what gave it that value in the first place. Like I said, maybe I'm simply overlooking something or was never taught in the first place. I know that often we describe the value of gold in currency(dollars, etc) but isn't it the gold that gives the currency value?

If the SHTF, I can't imagine people would be clamoring for gold, unless someone else deemed gold valuable enough to trade for necessary resources. For example, royalty has gold that makes them wealthy and influential. But how does that gold bring them wealth? By trading to the peasants? What use to peasants have for gold? This is the only example I could think of. I guess it's why gold always seemed strange to me, because it's used to describe, but only unless it's deemed worthy does it really do any good. Someone has to want that gold in order for it to be worth something..

Just hoping maybe someone can clear that up for me(without being too condescending please )

That's something I've wondered myself. I think gold does have some value for electronics and probably other things. Anyone I've ever asked has said its scarcity is what makes it valuable. That makes sense to a point, but still isn't a good enough answer for me. There must be things that are scarce but not valuable. Having said that, I do believe in owning gold as a hedge against inflation, even if its value is just based on its perception as valuable.

[TnAndy]

Actually, the high for silver over the last 650 years was $806 in 1477 ( 1998 adjusted dollars ). The low was $4.72 in 1992.

Chart HERE

[plowjockey]

Originally Posted by wolffeathers

Here's a little bit of a random question. It may show ignorance on my part and I'm hesitant to ask, but if you never ask, you'll have a heck of a time learning.

I have always wondered what makes gold so valuable? Is it simply because that is what was 'picked' for the 'universal' currency?

I understand the gold and silver hold value, just wondered what gave it that value in the first place. Like I said, maybe I'm simply overlooking something or was never taught in the first place. I know that often we describe the value of gold in currency(dollars, etc) but isn't it the gold that gives the currency value?

If the SHTF, I can't imagine people would be clamoring for gold, unless someone else deemed gold valuable enough to trade for necessary resources. For example, royalty has gold that makes them wealthy and influential. But how does that gold bring them wealth? By trading to the peasants? What use to peasants have for gold? This is the only example I could think of. I guess it's why gold always seemed strange to me, because it's used to describe, but only unless it's deemed worthy does it really do any good. Someone has to want that gold in order for it to be worth something..

Just hoping maybe someone can clear that up for me(without being too condescending please )

You are ahead of the curve, more than you think.

Gold got it's value, because at one time it was relatively rare. Not nearly as rare anymore, with mega-mining.

It's value is simply percieved, like anything else. Look up the dutch tulip bubble of 1624, for information on perceptions of value.

If the SHTF, the gold/silvers hoarders may only be kidding themselves. LEAD will have much more purchasing power, than either silver or gold, unfortunately and there are plenty of folks stocking up on lead, which is quite cheap.

Even if they can purchase with gold/silver, they better have a bunch of if, as scarce commodities will equal large prices.