Precious Metals Purchasing Act: The End Of Cash-Precious Metals Transactions in Illinois?

Illinois recently introduced the draconian legislation to watch precious metals buyers and sellers closer than they heretofore have.  The Precious Metals Purchasing Act reads:

Provides that a person who is in the business of purchasing precious metal shall obtain a proof of ownership, create a record of the sale, and verify the identity of the seller. Provides that a person who is in the business of purchasing precious metal shall not pay for the precious metal in cash and shall record the method of payment. Requires the purchaser to keep a record of the sale for one year or, if the purchase amount is over $500, for 5 years. Provides that a person who violates the Act is guilty of a petty offense and subject to a fine not exceeding $500. Provides that the Attorney General may inspect records, investigate an alleged violation, and take action to collect civil penalties.

Senate Committee Amendment No. 1
Authorizes inspection of records by local police departments. Requires reports to law enforcement on a daily basis. Exempts persons licensed under the Pawnbroker Regulation Act.

So, let’s walk through an experience as now defined by Illinois new big brother law:

a man – say, 50 years old – wearing a sidearm carrying a heavy green box walks into a precious metals shop. The shop does not lock them in, and one of the employees walks up to the door to inform him that no firearms are allowed into the shop, the man must walk back to his car and put his firearm away with the untold value in his arms. Finally, he returns.

“Hello, I’d like to sell some silver,” he expresses.

“Ok, that’s not a problem – no problem at all. What have we got here? Oh, some silver eagles, very beautiful. Can we see your “proof of ownership.”‘

“Proof of ownership?” the man asked, bewildered.

“Yes, under new law in Illinois you must present me, the bullion dealer, with some sort of proof of ownership – you know, a receipt, bank records confirming prior legal payment, etc. You know – protocol.”

“Yes, protocol, but of course. Well, I don’t have proof of ownership, you see. I purchased these while silver was only $10 per ounce. I paid cash. The whole lot only cost me $5,000…”

“Oh man, you’re gonna have serious capital gains on these suckers,” the bullion dealer grimaced. “I’m gonna need to see some ID while i decide whether or not we can purchase these babies from you.”

“Is there a chance I could get some of that in…”

“Not a green chance in hell, my friend. Sorry – the law is the law.”

“Oh, I am terribly sorry. I didn’t realize that was a law.”

“Yep, brand new for 2013.”

The bullion dealer vanished into the backroom, where he picked up the phone, dialed a number, and began to scan the man’s drivers license. Just then, a younger man walks into the shop to sell 1 silver round. The company pays him through a wire transfer and the funds are available three days later. The 50-year old customer trying to sell his life savings shakes his head. He should of sold in 2011, he guesses. The bullion dealer’s return:

“All right, sir, well I’m looking into this. You asked some questions that concerned me, so I called the local authorities down just to give me their second opinion. No big deal, just protocol. Would you like a glass of purified water?”

“No, thank you. I’d like my coins back and I’d like to leave.”

“I am sorry, sir, if I did that it’d be awfully suspicious by law enforcement. Let’s just give it a few minutes, I am sure this will all end just fine.”

No way will the state be able to manage such oversight, and if they attempt it in a manner that stunts business, precious metals dealers will see a decline in business as people take to so-called “gray markets” so as to carry out their peaceful transactions outside the purview of big brother. The law is an unfortunate sign of an over-reaching government, but can be averted by simply withdrawing and transacting with those closest to you.