Day By Day© by Chris Muir.

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Friday, June 17, 2011

Will Precious Metals Soon Become Illegal Again?

cute now, not so cute later
Today I was in a coin shop and one of the clerks told me they'd made silver illegal in Luxembourg.  I think he was pulling my leg though because I couldn't find anything about it online later, and there were also adult diapers involved in the story (like people who won't leave their slot machines wear).  That would be truly weird, and frankly I don't think watching the price of silver on Kitco.com is all that exciting most of the time.

HOWEVER, truth is stranger than fiction: I got home and discovered in someone's comment on Zero Hedge that FOREX.com has been sending people the following message:
We wanted to make you aware of some upcoming changes to FOREX.com’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.
In conjunction with this new regulation, FOREX.com must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.
 This is for paper trading only, but could it possibly spread to physical PM's?

While I'm here, I would also like to point out an ill effect another law, the HIRE Act, will have.  Part of this law was designed to frustrate the rich from dodging taxes by expatriating their money.  However, it will screw up average-joe American expats as well as anyone who wants to become an expat.  For example, when the dollar implodes, I imagine there will be many Americans who will want to leave the US and go live somewhere that is more free and prosperous.

This law, when it goes into effect Jan. 1 2013, will make it hard to get any significant amount of money out of the US.  It will tax unreported money going out of the US by 30%.  It will also enable the IRS to detect the assets and income of Americans living abroad even if they have not filed taxes for years.  You'll have to report any account containing more than $10,000. Expat tax planning websites are saying that any expats who haven't bothered to file taxes for a while really should do so now.  See the following links.  Foreign banks are now already refusing the business of American expats because of the steep fines and fees associated with this law.  And it hasn't even gone into effect yet.
http://www.expatexchange.com/lib.cfm?articleID=3721
http://www.thailawforum.com/blog/a-little-known-us-law-packing-a-huge-punch-the-us-hire-act-and-how-it-affects-us-expat-taxes
You can read the HIRE Act on Scribd, linked on my economic crash page. (link at top right of blog)

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