I’ve read about that case. They weren’t exactly just using gold as money, they were taking advantage at a stupid (and arrogant) government idea of denominating gold coins in artificially low dollar amounts to evade taxation. if everyone had been reporting and paying their taxes appropriately it would be much more interesting.
P. Lotor
@P. Lotor: But that’s the point, the government views gold and anything other than its fiat currency as a potential vehicle for tax-evasion. If each exchange is denominated in dollars, its tax consequences can be calculated in dollars. If an exchange is performed with something other than dollars, its tax consequences are based on a somewhat arbitrary “fair market value” of the bartered goods.
In this case, Kahre chose a number that was far from the fair-market value of the gold coins but had been adopted by the government for its own nefarious purposes. Of course, this was doomed to failure and Kahre clearly understood this, else why bother trying to keep it a secret?
You seem to suggest there are no “real” obstacles to using gold coins as money. This case clearly illustrates that you are wrong. One of the hurdles to using gold coins is that you must report them at their “fair market value” when used in any exchange and this means they will be taxed, unlike FRNs.
Clayton -
I am not suggesting there are no obstacles to using gold as currency. I believe there to be significant obstacles, otherwise people would be using gold as currency! if you check out the other thread, I’ve added a few posts to bring the conversation along. I don’t believe the case you brought up is a useful example of why gold can’t be used as money because the primary issue is intentional tax evasion.
I am trying to make the case that the government prevents us from using gold as money, but I am finding it somewhat more difficult than I was lead to believe it would be. in the case of Kahre, I would see nothing wrong with the government requiring that the market value (in dollars) of the gold at the time of payment be used for tax reporting purposes.
There are obstacles to using gold as money, and sufficient obstacles that people don’t use gold as money, but I’ve heard a fair amount of misinformation too about why gold can’t be used as money.
Well, I strongly disagree with that. The whole reason the government doesn’t want people using commodity money is precisely because of the difficulties it causes in funding their wars and welfare dependents. A ‘flexible’ money allows the government to conceal the magnitude of the burden it is imposing on the public. An honest money means that the individual can see exactly just how much of his wealth is being taken by the government and the costs of creating the illusion of a “social safety net” are prohibitively high.
What natural obstacles are there?
Clayton -
Well, I strongly disagree with that. The whole reason the government doesn’t want people using commodity money is precisely because of the difficulties it causes in funding their wars and welfare dependents. A ‘flexible’ money allows the government to conceal the magnitude of the burden it is imposing on the public. An honest money means that the individual can see exactly just how much of his wealth is being taken by the government and the costs of creating the illusion of a “social safety net” are prohibitively high.
I haven’t argued otherwise. you’re attacking a straw man here.
What natural obstacles are there?
What do you mean? did I suggest there were “natural” obstacles? the whole point of the discussion is government obstacles. and those are anything but natural. I am trying to figure out exactly what obstacles government has put in place to keep people from using gold as money.