1099 Supply Shock for Gold Buyers

10-04-2010 • Jeff Lewis via LewRockwell.com

The 1099 reform in the health care bill passed by Congress and signed by the President has turned the physical gold market upside down. Under the new law, gold buyers and sellers will have to fill out a 1099 on each side of the transaction if the sales price is greater than $600. As a result, many investors who have been buying gold as an anonymous way to protect their wealth are now feeling the heat.

The Economics of the 1099

Just months after passage, the Senate has already moved to remove the 1099 requirement from the health care bill in an effort to reduce transaction and accounting costs for small businesses. With many companies processing far larger orders than $600 on a near daily basis, it is certain that new regulation will prove to be time consuming and costly.

Just today, the Wall Street Journal reported that in 2008, regulations cost businesses more than $1.7 trillion. This new regulation, one which virtually no business can avoid, will only add billions of dollars in additional regulation costs to an already burdened American economy.

2 Comments in Response to 1099 Supply Shock for Gold Buyers

Comment by Trouser Chili

Entered on: 12/2/2010 10:29:32 AM

I'm not sure this affects you if you purchase your gold in a different country.

The 1099 will require your SSN, something that people are not going to give out lightly. People will make up SSNs to keep their own private. A small transposition in a pair of numbers may be all it takes. Or customers may falsify their name as well, especially if they are paying cash. There will be no shortage of workarounds to this problem, and it will eventually go by the wayside.

Comment by Lucky Red

Entered on: 12/2/2010 5:36:27 AM

What in the world does the healthcare sell out have to do with the price and demand of gold? Where's the link here that I'm obviously missing?

Make a Comment (2) • Email Link • Send Letter to Editor