The national trade association for rare coin, currency, and precious metals dealers is sounding alarm bells for dealers, saying Washington lawmakers are considering legislation that would add regulatory burden to the coin and metals industy and encumber local deaers in the area and across the nation. The additional regulation proposal relates to what the industry calls the "cash market"--the over-the-counter portion of the business.
The current proposal is similar to a failed proposal debated in the spring of 2008 that called for expanded regulatory powers over the rare coin industry.
The intention of the original legislation was to shore up perceived loopholes n commodity trading oversight. The concern was highlighted by a case involving foreign exchange transaction fraud, according to Industry Counci for Tangible Assets trade association.
If the original legislation had passed, it would have “crippled our industry’s ability to do business,” the ICTA says on its Web site. And now the industry faces the same challenge again as the Commodity Futures Trading Commission--CFTC-- made a request for additional authority over precious metals and other commodities last week in Feb. 24th comments given by its Chairman.
While the PR given out by pro-reguatory camp centers on issues akin to money laundering, some say the proposal's true underpinnings is a red flag in terms of consumers' ability to take physical possession of gold. The fear harkins back to the 1930's when Roosevelt signed an executive order that made gold possession by citizens illegal. The alternative would be gold certificates--like stock certificates--that declare a claim to gold purchases that buyers can never hold.
"That (money laundering fears) is how it will be framed,” says Andrew Gause, who heads up SDL Numismatic Properties Inc. in New Jersey. “I think this is an attempt to force everyone to just buy ‘paper gold’. “
Gause has long-held criticisms about government accounting practices, including its reports of holdings in Fort Knox. Gause, a specialist in American coins has been in business since 1981 and has written The Real World of Money and Uncle Sam Cooks the Books.
Regardless of the extent of possible nefarious government intent, the ICTA trade association says the primary negative consequence for dealers would be the policing of retail transactions where dealers assist in financing, including lay-away and credit card transactions.
ICTA is urging dealers to contact their U.S. representatives to lobby against the legislation.
A number of coin and precious metals dealers operate in the Kansas City area.
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