So HOW do we return to Gold?

[Cinci4RP]

I have been taking a beating on several of my favorite off-topic Sports forums, about returning to a Gold standard. Even though I though I have presented the whole agrument against inflationary policy, there are a group that laugh off this notion and call me "as much of a nut job as Paul"

So Bradley, fsk etc. How do I answer this question:

"How does moving toward a gold standard prevent the ills that you claim the economy has without throwing us into Great Depressions? What mechanism do you propose deals with inflationary pressures on gold?"

Thanks for the help

 

[fsk]

I already addressed this point in my blog.

There are two ways to return to a gold standard.

1. Repeal all the transactions and regulations that prevent people from using gold as money. Allow gold and Federal Reserve Notes to trade side-by-side, with the conversion rate determined by the market. Allow people to open gold-denominated bank accounts.

There is zero chance of the above reform occurring.

2. Trade off the books and use sound money. Don't report your transactions to the IRS. This solution is called "agorism". If you adopt this approach, you are saying "The current economic and political system isn't working. It's time to move on to the next model for organizing society."

The Great Depression was 100% caused by the Federal Reserve. You're arguing backwards. You can't say "If we go back to sound money, there will be a depression or recession." *UNSOUND* money is the cause of boom/bust cycles.

Under a pure gold standard, with no government regulation of money, there is no deflation or inflation. Don't look to history as a guide, because government has always been tampering with money and banking.

 

[LinearChaos]

I think he has said he would repeal the tender tax and capital gains tax on gold and silver, and let companies mint coins to be used as a competing currency against the Fed Note. It would be gradual as the Fed Note continues to tank and the Specie backed competing coin stays pinned to gold and silver.

The Government would set the weights and measures and mints would mint the coins.

 

[LinearChaos]

There is zero chance of the above reform occurring.

That's funny because it's what Paul has said he would do.

 

[fsk]

That's funny because it's what Paul has said he would do.

Realistically, what are Ron Paul's chances of getting elected? Ron Paul is the only interesting candidate for President, but I'm aware that the odds are stacked against him.

Even if Ron Paul did get elected President, could he pass such a reform without the cooperation of Congress? If he passes an executive order, and the Supreme Court overrules him, then what would he do?

 

[TaxSlave]

fsk,

By the way, I like your blog (since you keep asking).

"What would he do?"

It's a long shot, but he could use the bully pulpit and encourage civil disobedience, and urge Americans to sit on juries and not convict. It worked to end prohibition! Just a thought.

--97T--

 

[fsk]

One thing that he could definitely do as President is pardon all tax evaders and order the Justice department to stop pursuing civil trials.

The President could also pardon all nonviolent drug offenders.

However, there would be public cries of outrage and "Impeach him!" cries from the media. Without control of Congress, they could easily get the 2/3 votes to impeach and remove him from office.

 

[Tom228]

First off, I believe the chances of going back to the gold standard or any kind of standard is slim-to-nil. To not "look to history as a guide" to the gold standard is not wise. The thing is that changes in our gold supply could cause to pretty crazy inflation and deflation. And when we put our trust in something like gold, we are then at the mercy of supply changes of gold or whatever you want to use. There is still a lot of gold left in the Earth so, the gold standard wouldn't be such a good idea.

It's true that the government does like to meddle with the market, that's what makes fiat money or the gold standard "risky." If the perfect capitalist society there is no government meddings, but that's not the world we live in.

All in all, if we go on the gold standard we become at the mercy of gold supplies. At least using fiat money, our money is controlled by the market. So whichever you prefer...

 

[Bradley in DC]

Probably the shortest, easiest to understand and "credible" to your critics would probably be Alan Greenspan's WSJ op-ed on how to do it in 1980. He suggested gold-denominated Treasury bonds to compete with FRN-denominated ones to get the all-important price signals needed for the transition.

 

[integrity]

We were slowly returning to gold and silver until NORFED was shut down. I guess it was too succesful for the FED.

 

[fsk]

The problem is that, historically, there was huge government manipulation of money.

The serious problems didn't really start until 1913, when the Federal Reserve was created. The USA didn't abandon the gold standard in 1933. The USA abandoned the gold standard in 1913.

 

[jon_perez]

Probably the shortest, easiest to understand and "credible" to your critics would probably be Alan Greenspan's WSJ op-ed on how to do it in 1980. He suggested gold-denominated Treasury bonds to compete with FRN-denominated ones to get the all-important price signals needed for the transition.

Sounds like a great idea to me.

 

[Cinci4RP]

Probably the shortest, easiest to understand and "credible" to your critics would probably be Alan Greenspan's WSJ op-ed on how to do it in 1980. He suggested gold-denominated Treasury bonds to compete with FRN-denominated ones to get the all-important price signals needed for the transition.

Bradley, is this the writing to which you refer?

 

[Bradley in DC]

Sounds like a great idea to me.

Don't you even start.

 

[Bradley in DC]

Bradley, is this the writing to which you refer?

Yes, exactly, thanks. If memory serves, there was a correction made by the paper which garbled a bit towards the end. It's late here, insomnia, and I can't recall immediately if this reading reflects those corrections. [EDIT: sorry, I remembered the year wrong, it was 1981.]

On a side note, my suspicion is that the Treasuries TIPS bonds (are those still around?) were a result of Greenspan's thinking in this commentary. FYI, Dr. Paul has readily accessible in his office in Lake Jackson binders and binders of the testimony of the Gold Commission including that of Mr. Greenspan who elaborated in much greater detail his suggestions for how to do it. It was the one thing he personally pointed out to me at the F.R.E.E. office when I was there.

 

[Brent H]

http://www.gold-eagle.com/editorials_02/sanders042002.html

THE ENEMY IN THE MIRROR

By Franklin Sanders
The Moneychanger
On 4/11/02 LeMetropole Cafe published an article by David B. Upham, "Will Gold Be Confiscated Again?" With all due respect to Mr. Upham, he erred when he wrote, "Gold's legalisation has not restored it as money. Government legal tender laws continue to force the use of so-called federal reserve notes. The use of gold as money remains forbidden. The absolute governmental monopoly of fiat money continues to be protected by law against competition from gold."

USING GOLD AS MONEY IS NOT FORBIDDEN

Effective October 27, 1977 (twenty-five years ago) gold clauses once again became enforceable in US courts. On June 5, 1933 House Joint Resolution No. 192 went into effect, which declared that it was against public policy to discharge debts by paying gold. That is, HJR 192 effectively made "gold clauses" (contractual agreements specifying payment in gold) unenforceable in court. They were not "forbidden" in the sense that you could go to jail for contracting in gold, you just could not avail yourself of the courts to enforce a gold clause in case of default.

The so-called "legalisation of gold" at the end of 1974 actually repealed the provisions of the Gold Reserve Act of 1934 that forbade private ownership of gold. However, gold clause contracts were still in legal limbo, so the law "legalising" gold clause contracts was passed in 1977, and is codified at Title 31, United States Code, Sections 5118(a)(1) and (d)(2). The enforceability of these new gold clauses was tested and upheld in Fay Corp. v. Frederick & Nelson Seattle, Inc., 896 F2d 1227 (9th Cir.).

THE US GOVERNMENT MINTS BOTH GOLD AND SILVER MONEY

Pursuant to 31 United States Code since 1986 the United States mint has minted gold coins in (crazy) denominations of $50 (one troy ounce), $25 (one-half troy ounce), $10 [sic] (one quarter troy ounce), and $5 (one-tenth troy ounce). The US mint also makes a .999 troy ounce (not one full troy ounce) pure silver coin called the Silver Liberty, but popularly known as the "Silver American Eagle."

These coins are all legal tender per 31 USC 5103, "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts."

How this could be plainer, I cannot imagine.

SO WHO HAS THE MONOPOLY?
Mr. Upham states, "The absolute governmental monopoly of fiat money continues to be protected by law against competition from gold." Let's unravel that claim.

First, the government doesn't issue the fiat money, the Federal Reserve banks do. The federal government tenders bonds to the Federal Reserve system, which in turn either issues Federal Reserve notes or issues bank deposit credit in favour of the government. The Federal Reserve also issues bank notes or bank deposit credits to pay for purchases of securities from private banks.

Therefore, Mr. Upham has inaccurately accused the federal government of exercising a monopoly of creating money out of thin air. No, in 1913 the federal government gave this monopoly to a private cartel, the Federal Reserve system. See 31 USC 5103, cited in full above, which grants legal tender status to Federal Reserve notes. In Title 12, USC Section 412 Federal Reserve notes are further described as "obligations" of the United States government. Further, all private banks in this country create money out of thin air whenever they loan money.

WHO CREATES WHAT?

So who creates the fiat money? Technically, the Federal Reserve system and the banks do the deed, not the US government. The US government's brand of fiat money is called US notes (pursuant to the Greenback Act of 1863, as amended), and the Federal Reserve has pulled all of those out of effective circulation.

So while a monopoly indeed does create fiat money in the US, it is the privately owned Federal Reserve system and privately-owned banks that do it, not the federal government directly. On the question of whether the Fed is a private entity or not, see Lewis vs. United States, 680 Fed. 2nd 1239 (9th cir., 1982). As the old joke goes, the Federal Reserve is not federal and has no reserves. That's right, the Fed is not a government entity, and never mind the window dressing.

Secondly, if the United States government itself issues gold and silver coins, and these are freely available in the market place (along with many foreign minted coins), no one could reasonably conclude that the government is protecting the monopoly "by law against competition from gold." One may reasonably argue that the government has corruptly bestowed a monopoly on creating fiat money to a private cartel (the Fed and the banks), but that is another matter.

Thirdly, even the monopoly competes with itself. People use many forms of money in the US: Federal Reserve note currency, checks, and most of all, credit cards. Credit card issuers, too, create money out of thin air.

THE ENEMY IN THE MIRROR

There is no law that prohibits Mr. Upham or anyone else in the US from using gold and silver money, and all the gold and silver coins ever minted by the US government are still "legal tender." But that just makes the riddle deeper. If that's so, why do we all use paper money, bank deposit money, and credit card money?

Because fiat money is easier to use than gold or silver. So rather than make a fuss or cause trouble, we do what is easy.

If you want to see the real enemy of sound gold and silver money, look in the mirror. They exploit us because we want to be exploited.

Below you will find a short article article that explains the whole hilarious US monetary system.


BEATS ME! WHAT IS A DOLLAR?

Pose this question to a federal government or Federal Reserve official and he will run you around the bush for months, mumbling blather like, "The value of the dollar depends on the productive capacity of the U.S. Economy" or "Dollar currency is backed by the full faith and credit of the United States Government." They may even read to you from a dollar bill, "This note is legal tender for all debts, public and private" -- perhaps adding to the mystification by citing some public law of such and such date.

Ask this question in a state court (say, when a judge assesses a fine) and you will most likely land in jail. "Judge, I want to pay all my debts, not just discharge them but the law makes conflicting Statements about what a dollar is. Can you tell me what this state has declared a dollar to be, pursuant to the U.S. Constitution at Article 1, Section 10? Then I can be sure I have paid the fine in dollars."

You will set off on a hilarious, rollicking journey through numerous damp penal institutions as the judge and every other state official from Governor to Second Assistant Tire Checker ducks, dodges, and weaves to avoid answering your question. They all know that every state violates Article 1, Section 10, enforcing payment in "dollars" of bank credit or Federal Reserve [bank]notes, but they surely won't be the ones to admit it. The emperor has no clothes, but I don't want to be the one to tell him

Congress shall have power . . .

Under the common law, which is still our right, nothing but gold and silver was money The United States Constitution at Article 1, Section 8 granted congress power to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and 'measures."

No State shall . . .

The Constitution at Article I, Section 10 withdrew from the states power to declare anything other than gold, or silver a tender in payment of debts. "No State shall *** emit Bills of Credit [legal tender paper money]; make any Thing but gold and silver Coin a Tender in Payment of Debts."

THE STANDARD DOLLAR & DOLLAR STANDARD

Pursuant to the Constitution, congress later enacted the Coinage Act of April 2, 1792 1 which forever set and immutably fixed the standard dollar as a weight of silver equal to 371.25 grains (0.7734 troy ounce or 24.0565 grams or 1.292929 dollars of silver to the ounce. The same act provided for gold coins valued but not denominated in dollars ($10 eagles, $5 half-eagles, and $2.50 quarter eagles). Once a standard has been set, it cannot be changed, any more than congress could declare that the present "foot" measure should comprise ten inches rather than twelve. The only constitutional standard money of the United States is the 371.25 grain dollar of silver.

At first dimes, quarters, and halves were simply the tenth, fourth, or half weight of a silver dollar. However, the Act to Devalue the Subsidiary Silver Coinage of February 21, 1853 2 reduced the weights of the dime, quarter, and half dollar to 173.61 grains (0.3617 troy ounce), 86.805 grains (0.1808 troy ounce), and 34.722 grains (0.07234 troy ounce), respectively, and made them legal tender for $10.00 only.

ADJUSTING THE GOLD COINS

Because Congress set the silver price of gold too low in the Coinage Act of 1792 (at 15:1), gold fled the U.S. to other world markets where it bought more silver. Thus in 1834 congress finally had to adjust the weight of the gold coins to reflect their market value in silver. The Coinage Act of 1834 3 reduced the gold coins' weight slightly. The Coinage Act of 1837 4 minutely reduced the weight of gold valued at one dollar to 23.22 grains of fine gold (0.04375 troy ounce or 1.5046 grams), 20.6718 dollars to the ounce.

A GOLD STANDARD?

The Gold Standard Act of March 14, 1900 5 defined a dollar of gold as a weight of fine gold (24 karat) of 23.22 grains (0.04375 troy ounce or 1.5046 grams), 20.6718 dollars to the ounce, no different from the Coinage Act of 1837.

WHAT ARE FEDERAL RESERVE NOTES?

Federal Reserve notes are not "dollars,' but they are "legal tender." Whenever a contract payable in "dollars" fails to specify payment in a certain form of "dollars," the payee must accept whatever sort of "dollars" are defined in the law as "legal tender." The law states, "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts. Foreign gold or silver coins are not legal tender for debts." 6

The law defines Federal reserve notes as "obligations of the United States *** receivable for all taxes, customs, and other public dues." 7

ANOTHER GOLD STANDARD?

The Gold Bullion Coin Act of 1985 8 provided for the American Eagle gold coins containing one troy ounce (denominated "$50"), one-half troy ounce (denominated "$25"), one-fourth troy ounce (denominated "$10" [sic]), and one-tenth troy ounce (denominated "$5").

ANOTHER SILVER STANDARD?

The Liberty Coin Act of 1985 9 provided for 0.999 troy ounce (not 1.0000 troy ounce.) silver coins denominated "one dollar" and "one Oz. Fine Silver." Although their official name is "Liberty [silver] coins," they are commonly but erroneously called "silver American Eagles.'

MULTIPLE LEGAL TENDERS

Since 1985 congress has provided the United States with a complex multiple legal tender monetary system composed of many sorts of "dollars": irredeemable United States notes 10, irredeemable Federal Reserve note 'dollars," 11 base metal token coins and debased silver coins 12, 1792-standard dollars of silver 13, 1900-standard "dollars" of gold 14, American Eagle gold "dollars" and silver Liberty 0.999 troy ounce "dollars" 15. All are denominated in "dollars" although markets value these various "dollars' at vastly different rates.

NOT SINCE THE WAR OF NORTHERN AGGRESSION

The last time this situation prevailed was after the War Between the States when United States notes, national bank currency, U.S. silver coins, and U.S. gold coins were all legal tender denominated in "dollars" and all valued at differing rates. In 1878 the United States Supreme Court construed these contradictory laws as meaning that "a dollar is a dollar is a dollar" for legal tender purposes. 16

One owing a debt may pay it in gold coin or legal-tender notes of the United States, as he chooses, unless there is something to the contrary in the obligation out of which the debt arises. A coin dollar is worth no more for the purposes of tender in payment of an ordinary debt than a note dollar. The law has not made the note a standard of value any more than coin. It is true that in the market, as an article of merchandise, one is of greater value than the other; but as money, that is to say, as a medium of exchange, the law knows no difference between them. 17"

WHAT IS A DOLLAR?

The implications, especially in accounting for revenue and paying taxes, are staggering but untried and unproven in court. In personal business you are unquestionably free to write contracts specifying payment in legal tender gold18 or silver coin and thus contract out of the paper money system. But one point is clear: the only thing that gives the government and the Federal Reserve power over our economic system is our own willingness to use their irredeemable paper notes in our daily lives. If you are a slave of the paper money system, you are forging your own chains.

 

[Brent H]

A Southern Nevada Man trumped the IRS in federal court by challenging the dual monetary system.

http://onemansthoughts.wordpress.co...ourt-by-challenging-the-dual-monetary-system/

On a 106-degree May afternoon in 2003, government agents raided several establishments belonging to Southern Nevada businessman Robert “Bobby” Kahre. With guns drawn, officials held more than 20 handcuffed workers in the sun without water as agents collected records and other materials.

Kahre hadn’t committed a crime. He had upset the Internal Revenue Service by paying his workers based on the face value of gold and silver coins, versus the market value in the Federal Reserve system (the value of the coins in U.S. paper dollars). Even though the coins were in circulation, displayed a face value, and were regulated by Congress, the IRS’s confusing and endless tax code did not determine how to handle these gold and silver coins if used for payroll. The tax code only references dollars. It does not distinguish between coined money and paper money.

Kahre didn’t opt for the precious metal bullion system without first doing his homework. He consulted monetary experts, engaged in extensive research, and even met with congressmen. Kahre’s conclusion was simple: While the currency in the precious-metal system was greater in value than the currency in the other system, as money and a medium of exchange, the law knows no difference between the face value of both currencies.

The IRS expected Kahre to report his workers’ earnings based on the coins’ market value in the Federal Reserve system. Instead, he didn’t report or pay anything at all because the face value of the coins fell below the reporting threshold. The IRS alleged that Kahre and the other defendants paid at least $114 million (based on the Federal Reserve system) to workers. The use of these coins in trade is a direct challenge to the fiat money system now in place.

“Bobby Kahre is the only person in the world I know of with the courage to do that,” said Joel Hansen, a Las Vegas attorney who represented one of the nine defendants in the case.

While the purpose of the case was to identify the intent of the defendants, the trial that followed tested America’s dual monetary system and further validated that the U.S. greenback is quickly becoming more and more a worthless piece of paper.

In 1985, Ron Paul and other congressmen challenged our country’s currency system, which was monopolized by Federal Reserve Notes (FRNs) — the familiar greenbacks in American wallets. The congressmen successfully pursued the Gold Bullion Coin Act, which required the U.S. government to mint and place gold coins in denominations of $50, $25, $10 and $5 into circulation based on demand. The coins are made of 91.67 percent pure gold.

The ultimate purpose of the act was to allow Americans to invest in gold. However, it also brought sanity back to this country’s monetary system by establishing a dual system. Instead of the Federal Reserve solely providing the money supply by endlessly printing FRNs, the U.S. government now minted and circulated precious metal coins.

In the mid-’90s, Kahre began exercising this alternate system. He compensated workers for their labor in the form of these gold and silver coins versus FRNs. The workers calculated their income and tax liability based on the face value of the coins.

One gold coin with a face value of $50 currently equals $806 in FRNs. If a worker earns a $50 gold coin each week, that person takes home an annual income of $2,600 based on the precious metal system, which is below the income-tax reporting threshold for an employee. However, the value of the coins in FRNs — $41,912 — is not. That’s the basic idea.

The IRS did not fancy Kahre’s gold-and-silver payroll system, and after seven years of operating his family businesses in this fashion, he and eight others found themselves as defendants in a Las Vegas federal courtroom. Kahre was charged with 109 counts of tax-related crimes, varying from tax evasion to willful failure to file and conspiracy to evade taxes. Fifty-two other counts were divided among the other defendants.

While the case was about the intent of the defendants, it raised several issues. There was the issue of whether or not Kahre’s workers were considered independent contractors, who are responsible for paying their own taxes, or employees, who have their taxes withheld by their employer each pay period. Then there’s the issue of America’s dual monetary system. If there are two monetary systems, and the value of one system’s currency is greater than the other beyond its face value, what is the standard for determining the value of taxable income?

No Federal Court of Appeals has ever ruled that the gold coins in question must be reported to the IRS based on FRN market value.

“The defense showed that the defendants believed in good faith that a Federal Reserve Note is not the standard because Congress created the dual monetary system,” Hansen said. “The defendants believed that gold and silver coins are just as legitimate and legal as our other tender, the FRN.”

Kahre certainly caught the attention of the IRS. In addition to operating his businesses via the gold-and-silver payroll system, according to testimony at the trial, he helped 35 other contracting companies do the same.

But even though Kahre and his colleagues followed the dual monetary system mandated by Congress, the IRS didn’t care. To America’s most feared agency, the bottom line was Kahre’s workers weren’t taxed enough for their labor.

Based partially on cases that pre-dated the 1985 Gold Bullion Coin Act, the judge in the case did not allow defense attorneys to argue that Kahre was justified to pay workers based on the face value of the coins. Based on case law, the court concluded that income had to be calculated based on the FRN fair market value, rather than upon the face value.

A flaw with some of those cases was that each referred to double-eagle gold coins, which Franklin D. Roosevelt outlawed in 1934. Those coins are no longer in circulation like the coins minted by the U.S. government following the 1985 Act. The double-eagle coins were deemed to be property for tax purposes in those old cases.

Of course, the judge’s rule was binding upon the parties and was followed by the defense attorneys at the trial. Hansen, under the good faith belief defense, was able to present evidence that his specific client, Alex Loglia, who performed research work for Kahre, did not have intent to commit tax crimes. This interesting twist allowed jurors to still hear the argument that Kahre was justified to pay workers based on the face value of the coins. The U.S. Supreme Court had long before ruled, in the Cheek case, that a good defense in a tax-evasion case is a person had good faith in not following certain tax laws.

“The Supreme Court said, if they don’t have criminal intent, then they are not guilty of tax evasion,” Hansen explained. “That doesn’t mean you don’t have to pay the tax, but it means you didn’t commit a crime and won’t go to jail for a felony.”

In 2005, Loglia penned a paper that earned him an ‘A’ from his law school professor Jay Bybee (who just happens to also be a 9th Circuit judge) on the gold-coin issue and the separation of powers. His paper took the position that, under Article 1, Section 8, Clause 5 of the Constitution, Congress alone had the power to coin money and set its value.

Loglia’s position was that the judicial branch does not have this power.

“The judge applied those old court cases, but we were still able to make the argument that Alex was not criminally liable because he believed in good faith in the use of the face value of the gold and silver coins for tax purposes,” Hansen said. “Loglia’s 100-page legal paper was great evidence for the jury of his good faith belief.”

Beyond the courtroom, there is another significant issue with the Kahre case — it gives attention to the ever-decreasing value of the Federal Reserve Note.

One Euro is now worth $1.45 in FRNs. A Chinese Yuan buys the same as $1.34 in FRNs. Even the Canadian dollar is now more valuable than our paper currency. Compared to the American buck, it’ll buy seven cents more in goods and services.

“Because of how much stronger the Euro is compared to an American FRN, the Federal Reserve just pumped up to $50 billion of FRNs into Federal Reserve banks to prop up the banks,” Hansen said. “But when they do that, every dollar that you have in your pocket is now worth less.”

However, America’s other monetary system — gold and silver coins — does not decrease in value. It becomes more valuable in terms of FRNs. Americans, though, rely on the FRN, and its rapid decline will sooner than later decimate the middle class, Hansen said.

Take socialist Karl Marx’s theory, for example. He believed the most effective way to obliterate the middle class involved a system of progressive taxation coupled with inflation. In the Federal Reserve’s case, if the bank continues to inflate the currency so that everybody moves into higher and higher tax brackets, eventually everybody will pay 30 to 40 percent of their income to taxes in Federal Reserve Notes, all while the FRN decreases in value due to inflation.

“By using the gold coins, Kahre was beating Karl Marx, the socialists and the liberals who want people to pay more and more so they can have bigger and bigger government,” Hansen said. “Kahre challenged the whole system and that’s why the IRS came down so hard on him and his associates.

“The IRS doesn’t want this going on; they want you to use their fiat money and be forced into higher tax brackets through progressive taxation coupled with inflation. That way there’s no limit on the money they can issue and inflate.”

On Sept. 17, after four months of trial and days of deliberation, the Las Vegas federal jury returned with its verdicts. The courtroom was crowded as the IRS and Department of Justice filled the entire area on their side of the chambers with its officials.

Hansen was uncertain of what to expect. He just hoped that the jurors listened closely to the evidence presented.

“I could tell in the closing arguments, as I was watching the jury, that they were sympathetic to what I was saying. But what they were going to do, I did not know,” he recalled. “I think the government, because it had packed the courtroom, was confident they were going to get numerous guilty verdicts.”

Rather, jurors delivered zero guilty verdicts. Three defendants, all workers, were acquitted as well as Kahre’s mother, who worked as a runner for her son’s businesses. Two other defendants were partly acquitted — the jury hung on one count each. The jury also hung on all counts faced by Kahre, Loglia and Kahre’s sister, resulting in mistrials.

“I’m telling you that I have never seen such a dejected group of people leave a courtroom in my life,” Hansen said of DOJ and IRS officials. “They were shocked. Of course, we were pleased.

“The thing is, they had 161 counts and they did not get a guilty verdict on a single one. They got a big goose egg. We didn’t get not-guilty verdicts for everyone, but the government didn’t get anything.”

The IRS was supposed to notify the judge in late October if the agency intended to retry the five defendants on the charges that resulted in a hung jury. The government waffled, indicating they would pursue another grand jury and issue superceding indictments. More information will be known by mid-November.

Looking back, Hansen recalls what may have been a key turning point in the trial. The government called three accountants to testify. The defense asked each one, “What is the proper way to calculate income for purposes of the Internal Revenue Code if you are paid in a gold coin that has a $50 face value on it?” All three of them responded, “I do not know; I’ll have to research that.”

“One of them had a masters degree in taxation!” Hansen observed, saying their answers made it difficult to prove the defendants willfully committed tax crimes. “If accountants and masters of taxation don’t know the answer to this question, how in the world can they expect anything different from an ordinary person who is confronted with a dual monetary system created by Congress?”

Hansen believes it was uncalled for to prosecute Kahre and the other eight defendants criminally. The case revolved around a complicating and confusing legal issue. It should have been handled civilly, Hansen said, but the IRS wanted to make an example of these defendants because the federal government simply doesn’t want anyone paying a lower tax than what the feds determine should be paid.

“If a coin says it is a $50 gold piece, and it says ‘In God We Trust,’ and the law says that it is legal tender, and it is in circulation, isn’t it reasonable for people to think that they can calculate their tax liability based on that?” Hansen asks. “If a tax accountant can’t answer that question, how can a common worker be guilty of a crime? The outcome of this case is a magnificent victory for those of us who believe that the United States of America should have an honest monetary system.”

by Mike Zigler


by Mike Zigler