Could Your Rare Coins Become Legal Tender Currency?
How would you feel if your rare and bullion coin collections became legal tender currency…again?
There is a new movement afoot to "Make Money Great Again." A petition has been started on WhiteHouse.gov requesting an Executive Order from President Trump to order that gold and silver once again be freely used as money alongside paper currency in our society.
Here is part of the Executive Order that has been drafted:
"The Constitution explicitly recognizes that gold and silver coin
are money. Furthermore, in granting Congress the power “to coin
money and regulate the value thereof,” the Constitution does not
grant either Congress or the President the power to demonetize
gold and silver."
Any History Buffs Out There?
There are some interesting historical questions here. This request brings to the forefront ideas about what is money and what did America's founding fathers intend?
Here is a snippet from the United States Constitution Article 1, Section 10:
"No state shall…coin money; emit bills of credit; make anything
but gold and silver coin a tender in payment of debt."
Article 1, Section 8 gives Congress the power:
"To coin money, regulate the value thereof, and of foreign coin,
and fix the standard of weights and measures."
Remembering President Nixon
It was, of course, President Nixon who in 1971 ended the convertibility of gold to the dollar. Here's what Nixon said.
Taking the current petition to make gold legal tender a step further brings up the issue of returning American to the gold standard.
The size of the national debt – at nearly $20 trillion right now - is one of the key stumbling blocks that could prevent that.
So, the U.S. has a lot of gold, but is it enough to back all our debt? Not even close. Speaking with CME OpenMarkets Magazine, CEO David Beahm did some quick back-of-the-envelope math. “One ton equals 2000 pounds. One pound equals 16 ounces. 2000 times sixteen equals 32,000 ounces. With spot gold about $1,760, one ton equals about $56 million,” he says. That equals about $456 billion at current market value, or roughly half a trillion in gold."
The Rare Coin Outlook
The rare coin market has been strong in recent months as astute investors look to pick up bargains now before inflation drives prices sharply higher. There is a strong correlation between inflation and rising gold prices. But, studies have shown that rare coins tend to appreciate at an even faster pace during inflationary times.
It remains to be seen if the current petition to make gold and silver coins legal tender again gains any traction. Can you imagine what it would mean for the rare coin market if President Trump responded to this initiative favorably? The value of rare coins would skyrocket, as demand increased for gold and bullion coins.
The jury is still out on what might emerge from this petition, but it is fun to think about now, isn't it?
Blanchard is always sourcing new rare coin collections. Call us today to see what new inventory has come onto the market at 1-800-880-4653.