Legal Tender Isn’t So Legal


April 20, 2015

By: Kelly Diamond, Publisher

A story from four years ago reveals its true relevance when pieced together with the rest of  the puzzle: the government on every level wants full control over your transactions, because it wants full control over your assets and how you move them around.

cash not acceptedI’ve travelled quite a bit. I’m no “Rick Steves” and I certainly don’t claim to be some cultural guru, but there are certain indelible memories you can’t shake. I remember living in Japan and not being allowed to use credit cards, debit cards, or checks. Everything was cash transactions. The ATM machines actually closed at a certain time! Coming from America where I was using credit cards for a candy bar at the book store, I found that to be highly inconvenient.

I remember going to Thailand. I was warned of their highly oppressive government; to avoid any suspicious behavior and keep my bags close because I would NEVER want to be apprehended by their police and thrown into one of their prisons. Prior to getting there I was expecting jack-booted juntas and tanks in the streets of Bangkok. Not even close. It was more like a bazaar on Koh San Road of people haggling over wrap-around skirts and tiny bananas. The same was true when I went to Indonesia: people selling something roadside until they ran out, and then going home.

All cash transactions, and funny looks when you pulled out a credit card.

Japan, Thailand, and Indonesia are supposed to be less free than the United States. And to be sure, there are certainly instances where that is likely true. But the fact remains that basic trade amongst private individuals is largely left alone in those countries, while the US has taken to micromanaging everything from Bitcoin to Craigslist.

If you recall, about two years ago, I wrote about the “War on Virtual Currency”. Well, two years before that, Louisiana passed a law making it a criminal act to sell 2nd hand goods for cash. That’s right, legal tender isn’t so legal any more. The reasoning is similar to that of waging the war on virtual currencies: it’s not easily traced, and money launderers and criminals would use it to carry out their nefarious plots!

What I’m seeing here is the unsustainable nature of market regulations:

  • Government doesn’t want you to spend your money on X (e.g. drugs, gambling, prostitutes, guns, etc.)
  • A black market is created because making something illegal doesn’t destroy the demand, but only stymies the supply chain.
  • Black markets find less traceable methods of moving product around.
  • Government now needs to regulate those less traceable methods.
  • …which creates another market for less traceable methods.
  • …which begets another need for regulations on that.

Replace the first point with “Governement taxes the life out of certain things” and skip the second point and you have the dark underbelly world of sales tax evaders. Oooooh. Scary. Eric Garner was killed over selling untaxed loose cigarettes, which explains the lengths to which government will go to get their taste off the top of every transaction.

The point being, much like the storyline of “Minority Report”, fear is the justification for this Louisiana legislation.

But let’s not ignore some of the finer points of this bill and its implications. Thad D. Ackel, Jr. Esq. of Ackel & Associates LLC brings two important pieces to the forefront in his brief write up on this.

First, there’s this:

“House Bill 195 of the 2011 Regular Session (Act 389) broadly defines a secondhand dealer to include ‘… Anyone, other than a non-profit entity, who buys, sells, trades in or otherwise acquires or disposes of junk or used or secondhand property more frequently than once per month from any other person, other than a non-profit entity, shall be deemed as being in the business of a secondhand dealer.’

“The law then states that ‘A secondhand dealer shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property. Payment shall be made in the form of check, electronic transfers, or money order issued to the seller of the junk or used or secondhand property…’”

Then there’s this:

“The law goes further to require secondhand dealers to turn over a valuable business asset, namely, their business’ proprietary client information. For every transaction a secondhand dealer must obtain the seller’s personal information such as their name, address, driver’s license number and the license plate number of the vehicle in which the goods were delivered. They must also make a detailed description of the item(s) purchased and submit this with the personal identification information of every transaction to the local policing authorities through electronic daily reports. If a seller cannot or refuses to produce to the secondhand dealer any of the required forms of identification, the secondhand dealer is prohibited from completing the transaction.”

So charities and local churches can have their yard sales, and that’s okay. But if you have more than one garage sale per month or sell something on Craigslist more than once per month, you’re in some deep trouble… unless you can find someone who’s willing to hand over all their personal information to you so you can then faithfully hand it over to the local police. This is regardless of the form of payment.

You’ll be happy to know that pawn shops are exempt from this. They already collect information and submit it to police to ensure the items are not reported as stolen, but they can still deal in cash. The car dealership next door to that pawn shop, however, cannot.

While I agree that stopping thieves from thieving is a good thing. But Mr. Ackel goes on to point out: “there are already laws that prohibit stealing, buying or selling stolen goods, laws that require businesses to account for transactions and laws that penalize individuals and businesses that transact in stolen property.” Why is there a need for this measure as well? Is there NO other means by which to apprehend such criminals except to intrude on the privacy of everyone who does second hand business?

Here’s the sad part: while this law was purportedly intended for thieves and criminals, guess who really gets hurt? The struggling class of erstwhile law-abiding citizens who are just going about their business and harming absolutely no one in the process.

I get a lot of criticism for being a capitalist. But garage sales, farmers markets, lemonade stands, and private charities all fall under this economic model. They all are means by which private citizens could help or sustain themselves. They are also activities which are under heavy scrutiny by the state, if not outright illegal.

So that guy who was getting a little extra scratch on the side for trading his baseball cards? Or the lady who hits up the flea markets for hidden deals, refurbishes them, and resells them on Craigslist? Or the salvage yards who sells scraps and parts from otherwise inoperable machines?

What Louisiana did was drop a huge legislative bomb on scavengers. I liken this to when a teacher keeps the entire class after school because one kid decided to act up.

Why is this important… especially a piece of legislation that passed four years ago in the damn bayou no less!? It’s important because it is another piece to a puzzle which is revealing a bigger picture. On its own, we could probably write it off as some fluke. But it’s not on its own. It’s in conjunction with several other federal and state policies:


War on virtual currency

Civil Asset Forfeiture

Reporting bank transactions over $5,000 to police

Your money in a bank is not your money but it’s the bank’s money

Are you noticing a pattern at all? Perhaps it’s not a “War” on virtual currency, but rather one of many battles; and the real war is on commerce and private property in general. But think of what happens when you have government placing embargoes and sanctions and tariffs on trade between countries. When countries do this to one another, it’s considered an act of war. When countries do this to its own people, what is it?

If FATCA has taught us nothing else, it’s that regulations tied to doing business with Americans are too expensive and not worth the time, expense or effort in other countries. They would rather just not do business with Americans at all. Funny how business has this little hang-up about being “worth your while”.

Louisiana has the highest incarceration rate of any other state in the union. Perhaps it has a lot to do with the fact that it creates criminals out of thin air in the name of catching real criminals. The entire US is heading in that general direction; the grip is getting tighter and it’s time to protect yourself.

If you see the writing on the wall too, click here to schedule a consultation on how to protect yourself, your privacy, and your assets.


1 thought on “Legal Tender Isn’t So Legal”

  1. I recall when those laws were first passed in Louisiana.

    A certain governor’s repeated public comment comes to mind, and it really hit home once I realized how close and how short the drive time is from my community to Lake Charles, Louisiana:

    “Texas is open for business.”

    – Governor Rick Perry

    Now when he said it he was often saying it to CEOs operating in other states in trying to convince them it was in the corporate best interests to relocate (he said it a lot to Washington State businesses), but the same applies to individuals who are also suffering from the progressive tax regimes. In this day and age someone can take a “vacation” once or twice a month and not necessarily be suspicious, especially in this post-Katrina day and age.

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