Silver Rounds Vs Silver Coins

The danger of stacking coins is, in my opinion,

Government tends to markup base metal coins (face value > material value); but markdown precious metal coins (face value < material value). What kind of practice is this?

They could recall all the coins by its face value when situation becomes dire.

Isn't coin and currency the property of the govt, unlike guns which are usually privately manufactured.

Governments - all governments everywhere, not just yours - put minimal face values on their bullion coins because they do not want them to be actually used as money. They do not want this because if the price of silver collapses, they would then be forced to buy back the silver they had used, at a loss to them.

Suppose the government issued one-ounce silver coins with a $10 face value. It has to buy the silver at current market rates to make them. If/when the price of silver falls below $10/ounce, what are people who own those coins going to do with them if they need to exchange them for cash? Take them to the silver merchant and get $8 or $9 for them, or take them to the bank and get $10 for them? People will bank them, of course. The bank isn't going to re-issue them, they'd dispose of them the same way they dispose of banked NCLT and obsolete coins: return them to the Treasury - which in effect would be forced to pay $10 each for them, melt them down, and sell off the silver at the then-current silver price. The whole point of governments making coins is to make a profit doing so; those coins would be loss-making.


The situation in America is different to the situation in most other countries. In most countries, the coinage belongs to the government; you can't deface coinage, because it's government property. But in America, if you own money in the form of coinage, it actually belongs to you, and you're allowed to do pretty much anything you want to with it. The government's ownership of coinage ceases as soon as the coins are released into the banking system, or sold from the Mint (your banknotes are a different story; they belong to the Fed).

Which of course prompts me to consider a simple, elegant and perfectly legal solution to the hypothetical "government claiming my legal tender bullion for face value" problem: melt them down. The government can't claim what you've destroyed, and it's perfectly legal for you to destroy them.

Finally, to an important point. There are an awful lot of things that your government could, in theory, do. They could declare war on Australia tomorrow and invade, for example, and there'd be nothing much we could do to stop them. But they've currently got no particularly good reason for doing so, and a lot of very good reasons for not doing so - so even if the "situation becomes dire", I can sleep soundly tonight, confident that they wouldn't be so stupid as to try.

Likewise your government could, in theory, pass a law to attempt to recall bullion coins for face value. But I can't think of a single good reason why they would believe such a law was necessary, or be worth the extreme negative reaction such an act would certainly generate. Your ridiculously-low-face-value bullion coins are safe from confiscation.

Governments might not be able to trace your gold or silver ... but the US already has shown they can bar you from owning it. They have already done so with gold in the past. If you can't own it - you also can't sell it... so while they aren't taking it from you they can make it useless to you as well.

Can anyone please state examples of individuals in the US that have been jailed, or prosecuted for owning gold? I really doubt that it's ever happened.

But it did. The Wikipedia article on Executive Order 6102 lists several individuals and companies who were charged under the Order and resultant Gold Reserve Act, including some who served jail time.

It should perhaps be pointed out that rarely were such prosecutions conducted in isolation; hoards of gold were usually found as a by-product of other police investigations, such as fraud or tax evasion. So "gold hoarding" was simply one more charge they could throw at an accused criminal that was already having the book thrown at them. They certainly never sent out the jackbooted stormtroopers to search the homes of otherwise innocent people who might be hoarding gold and they never seized bank safety deposit boxes for a systematic search for secret hoards of gold.

It should also be pointed out that this previous instance of gold nationalization applied to all gold, whether in legal tender coin form or bullion form (since this was long before the invention of the concept of either "bullion rounds" or "bullion coins", all such non-legal-tender bullion was in ingot or scrap metal form). So the OP's question about rounds versus coins would have been irrelevant if this discussion were happening in 1934, as both were equally liable to forfeiture. Indeed, Section 2b of the Order gave specific exemptions for "gold coins having a recognized special value to collectors of rare and unusual coins" - in other words, coins which had a market value significantly above face or bullion value were immune from forfeiture. As far as I know, exactly how "special" or significant that difference in value had to be before a coin was considered exempt was never tested in court, but owning legal tender collectable coins was actually preferable to owning generic bullion back in 1934.

I heard there was a business owner (I cannot remember where, maybe Nevada?) that was paying his workers in US minted gold (and maybe silver) coins. The employees could/would report only the face value of the coins of their income, and the employer would only report the face value on his payroll.

Last I knew he was in deep with the IRS, but I don't know what eventually resulted. Maybe someone here does?

Yup. Just goes to show you that the face value of the coins means next to nothing. It matters what the coin is made of. Straight from the IRS.