By Scott Barman for the Gold & Silver Political Action Committee …..
From the Political Coordinator
This newsletter begins my fifth year of reporting the politics and policies of the numismatics and precious metals market for the Gold and Silver Political Action Committee.
At the end of June, I ended a temporary assignment working with a congressional support agency. After meeting with staffers, I can see the good that some are trying to do but I also see the frustration with how it gets done.
Internet sales tax talks stalled
As with many conversations on politically sensitive issues, there have been no conversations about the Marketplace Fairness Act (S. 598) or the Remote Transactions Parity Act (H.R. 2775). There is no incentive for anyone to work on these issues prior to the election.
Minnesota fixes dealer regulation
Under the guise of protecting the consumer after a high-profile incident by an unscrupulous dealer, Minnesota enacted regulations for selling any numismatic item with bullion content as well as bullion issues that have been labeled as draconian. The law required dealers to be registered with the state, have background checks, and required the purchase of insurance bonds. The legislation caused small dealers to leave the state and some out-of-state dealers refused to do business in the state, all while threatening to destroy the numismatic industry in Minnesota.
With the help of the Industry Council for Tangible Assets (ICTA), Minnesota dealers lobbied their legislature to reform the law. Signed by Governor Mark Dayton (D), the Bullion Product Dealers Regulation Authorization amends the Bullion Coin Dealer Law to make some common-sense changes that will make it easier for smaller dealers and coin show transactions to occur without the onerous documentation requirements of the original law. The amended law also exempts collector-to-collector transactions.
- “ICTA: Minnesota Law Targeting Coin Dealers Amended,” CoinWeek, June 14, 2016.
- J. Patrick Coolican, “Rare coin dealers’ lobbying paid off at Legislature,” Star Tribune, July 1, 2016.
Ohio passes numismatic sales tax exemption
Ohio Governor and former presidential candidate John Kasich (R) signed a bill restoring sales tax exemptions for coin and bullion sales. Ohio reversed the exemption following the conviction of Toledo-area coin dealer Thomas “Tom” Noe who lobbied for the exemption. Noe is serving an 18-year prison sentence as part of his conviction for stealing funds from the Ohio Bureau of Workers’ Compensation Funds when he was managing their rare coin investments.
Originally scheduled for a vote in December, it was tabled because of a veto threat from governor Kasich that was seen as part of his narrative while running for the Republican presidential nomination. After Kasich suspended his campaign, he worked with the legislature to have amendments added to the law to better protect against crimes committed by Noe.
The law goes into effect on January 1, 2017.
Ohio now becomes the 34th state to enact legislation that allows for complete or partial sales tax exemptions on the retail sales of bullion and numismatic items.
Brexit sends markets into turmoil
If markets do not like uncertainty, then the vote in favor of the United Kingdom to leave the European Union, known as Brexit (Britain Exit), is likely to have an impact for quite some time.
Since the June 23 vote, Prime Minister David Cameron has announced his resignation leaving the Conservative Party without a leader and previously ambitious members announcing they will not be interested in the job. Since Cameron is not calling for the Parliament to dissolve and new elections, whoever is elected the leader of the party will become the new Prime Minister.
World markets have risen and fallen with every hint of turmoil within the UK while cabinet ministers are trying to calm concerns over what will happen when the nature of their participation in the world markets change. It has not brought confidence when Scotland has threatened to hold another independence vote and that Google announced the top searches after the results included “What does it mean to leave the EU?”
The London PM Gold Fix was US$1,265.12 before the polls closed on June 23. The next day, the London PM Gold Fix closed at $1,315.50 (a four-percent increase). On June 30, the PM Gold Fix closed at $1,320.75, 4.4-percent increase since the vote. Experts are saying gold could continue to climb at the 4-percent rate for the near future.
Silver, which has been on a slow and steady rise for most of the spring, also saw a bump following the Brexit vote. When the London Silver Fix closed at $17.29 on June 23, this was already a $3.29 increase (23.5-percent) from the January 4 first close of 2016 price of $14.00. After the results were announced, London Silver Fix closed at $18.04, a 4.3-percent increase. With the London Silver Fix closing at $18.30 on June 30, some pundits are suggesting that silver will continue to outperform gold for the near future.
Among the more reasoned analysis, Credit Suisse raised their gold and silver target prices to $1,500.00 and $18.75, respectively. Aside from market uncertainty, they also cite a “significant physical deficit” that could send prices even higher.
Summary of Numismatic-Related Legislation
H.R. 5598: Plymouth 400th Anniversary Commemorative Coin Act of 2016
- Sponsor: Rep. William Keating (D-MA)
- Introduced: June 28, 2016
Referred to the House Financial Services Committee
S. 3105: Plymouth 400th Anniversary Commemorative Coin Act of 2016
- Sponsor: Sen. Edward “Ed” Markey (D-MA)
- Introduced: June 28, 2016
Referred to the Senate Banking, Housing, and Urban Affairs Committee
* * *
If you have any questions or comments, please feel free to contact me at [email protected]. “Letters to the Editor” are appreciated and may appear in a future newsletter.
Scott Barman, Political Coordinator for the Gold & Silver PAC
Barry Stuppler, Chairman Gold & Silver Political Action Committee