By Barry Stuppler for the Gold & Silver Political Action Committee …..
From the Political Coordinator
What began as an English proverb as “March comes in like a lion and goes out like a lamb” may become a relic of history. Aside from the weather implications, the markets are experiencing a lion-like robustness that even has the governors and branch presidents of the Federal Reserve issuing conflicting statements.
While the professionals are attempting to figure out what the economic numbers are saying, one thing is clear, the United States Mint is on its way to break its 2015 sales for American Silver Eagle bullion coins. March opens with the U.S. Mint announcing that it has another one million silver coins ready for sale. This is the fifth time this year that the U.S. Mint has made this type of announcement.
Year to date, gold prices are up about 17-percent and silver prices are up 11 percent. This has not stopped the buying of bullion coins. One Canadian dealer recently informed me that they sold out of a specific silver issue from the Royal Canadian Mint because of high demand, especially from the United States.
While many of the PAC members were in Dallas for the National Money Show, my business kept me in the D.C. area as a vendor at one of the largest antiques shows in the mid-Atlantic region. Although coins are a very minor part of the show, some dealers who were selling silver coins, saw high volumes of sales. One dealer reported that he sold out of the 30 American Silver Eagles graded MS-70 by the middle of the show’s second day.
An informal poll of attendees to the National Money Show suggests similar sales performances.
Even though there may be areas of the economy that haven’t caught up to the current economic trends, it is difficult to find an analyst or pundit that does not believe that the current trends will end in the short term.
It is likely that March will go out like a raging bull, even if I could not find a one-armed economist to disagree!
L to R: Barry Stuppler, U.S. Representative Pete Sessions (R-TX32), Kathy McFadden, and Jimmy Hayes
Session with Sessions a success
PAC members attending the National Money Show had the opportunity to meet Rep. Pete Sessions (R-TX32) on Friday, March 4. Sessions is the chairman of the very important House Rules Committee and a strong supporter of the Rare Coin and Precious Metal industry’s legislative efforts. Sessions played a crucial role in the Rules Committee to have the 2014 Collectible Coin Protection Act, the law that strengthened the Hobby Protection Act to better fight counterfeiting, added to the non-controversial docket. The bill passed with a voice vote.
The Gold and Silver Political Action Committee would like to thank the members that made this a successful event. Members contributed over $20,000 for Rep. Session’s campaign. Your contribution will help Sessions return to Washington as an advocate for the industry.
Congress votes to ban Internet access taxes
February saw the passage and signing of the Trade Facilitation and Trade Enforcement Act of 2015 (H.R. 644). As part of the compromise worked out by the conference committee, the new law makes permanent the ban on Internet access taxes. This means that taxes cannot be applied to access the Internet, although state and local governments have found ways to tax your Internet connection.
The proponents of changing the law to charge sales taxes on Internet-based sales see this as a small loss in order to gain a larger victory. Their rationale is to give up on this potential small revenue generator in order to convince congress to change the laws in order to collect more in sales taxes.
Both sides have retreated to their respective corners and trying to strategize their next moves. Proponents of the Internet sales tax have tried to influence the new major player in this story, Speaker of the House Paul Ryan (R-WI1).
Speaker Ryan, who is attempting to return the House to “regular order,” recently had to rebuff Senate Majority Leader Mitch McConnell (R-KY) by denying that he told McConnell that the House would take up the measure soon. Ryan’s office said that he has encouraged the committee to work on the measure.
Sources suggest that Ryan is unlikely to pressure House Judiciary Committee Chairman Bob Goodlatte (R-VA) on any bill that would increase taxes during what has become a contentious election cycle. Goodlatte, who has expressed concern over how Internet sales taxes would be implemented, is likely to continue to stall even though trade groups are trying to pressure Ryan to use other rules to bring the Marketplace Fairness Act (S. 689) to the floor of the House if it is passed by the Senate.
Although there would be enough votes to pass the Marketplace Fairness Act in the Senate, there may not be enough votes to overcome a filibuster. Sen. Kelly Ayotte (R-NH) has suggested she would filibuster this bill. Ayotte, whose home state of New Hampshire does not collect sales taxes, is in a close reelection race during a time that the people of the “Live Free or Die” state are not happy with her party. Allowing a vote that would create a sales tax for her constituents could damage her reelection bid.
Currently, the analysts believe that the Republicans can continue to hold congress but lose enough in the Senate to barely be in the majority. These predictions are based on Ayotte being able to hold onto her seat. If there is a chance that the party could lose the seat, Senate Majority Leader McConnell, who has been known to take the most politically expedient course of action, will allow cloture votes to fail to protect Ayotte.
Then again, politics have become so strange this year that I probably have a better chance of winning Power Ball than predicting the outcome of the Internet sales tax debate!
Sources:
- Vicki Needham, “President Obama will sign customs enforcement bill,” The Hill, Feb. 11, 2016. http://bit.ly/1U0OQZi
- Mario Trujillo and Naomi Jagoda, “Online sales tax supporters hope gamble pays off,” The Hill, Feb 16, 2016. http://bit.ly/1U9ISEf
- H.R.644: Trade Facilitation and Trade Enforcement Act of 2015.
https://www.congress.gov/bill/114th-congress/house-bill/644 - S. 689: Marketplace Fairness Act. https://www.congress.gov/bill/114th-congress/senate-bill/698
Counterfeiting in Europe
Europe has been seeing a significant rise in counterfeiting coins unlike any other time in history. During the last year, we have been chronicling the problems in the United Kingdom with counterfeit one-pound coins. Now the rest of Europe has been seeing fake one- and five-euro coins entering circulation in greater numbers.
When the problem began in 2014, the European Union governing body recommended that their member nations strengthen their laws and increase penalties on counterfeiters. This past month Portugal increased their penalties to comply with EU directives.
Portugal, whose economy has not recovered from the last downturn, has blamed counterfeiting as part of its problem. Government officials claim it is the lack of trust in the currency that prevents the movement of money.
In related news, coins made in mocking protest of the Swedish king in 2012 revived a debate over counterfeiting. The story began with a press release issued by the Swedish Central Bank about interest rates that included what was thought to be a stock photograph of coins. Instead, the photograph contained the 2012 protest coin that was seemingly mixed with the imaged pile.
The debate sparked discussions ranging from eliminating the coin, a low value one-krona coin, or accelerating the discussion for eliminating physical currency in favor of an electronic economy.
Even though the European Central Bank announced that there were fewer reports of counterfeiting in January, law enforcement officials on both sides of the Atlantic Ocean believe that counterfeit activity is on the rise. While targets remain the higher denomination banknotes, European officials are bracing for more attempts to counterfeit the one- and two-euro coins.
Sources:
- “Government moves to increase prison sentences for forging notes, coins,” The Portugal News Online, Feb. 25, 2016. http://bit.ly/1THNTpg
- “Fake Swedish coin mocking king reappears, fooling media again,” France24 International, Feb. 11, 2016. http://f24.my/24OlAc3
Summary of Numismatic-related Legislation
H.R. 4529: Naismith Memorial Basketball Hall of Fame Commemorative Coin Act
Sponsor: Rep. Richard Neal (D-MA)
Introduced: February 23, 2016
Referred to the House Financial Services Committee
Read the details of this bill at https://www.govtrack.us/congress/bills/114/hr4592
S. 2598: Naismith Memorial Basketball Hall of Fame Commemorative Coin Act
Sponsor: Sen. Elizabeth Warren (D-MA)
Introduced: February 25, 2016
Referred to the Senate Committee on Banking, Housing, and Urban Affairs
Read the details of this bill at https://www.govtrack.us/congress/bills/114/s2598
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
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