A question about the legal tender

[Jislizard]

I've always wanted to take an ounce of silver into a store and buy something with its legal tender value, but of course never would due to the loss i'd make. Would be funny just for the reactions

Some one used to come into the newspaper shop which provides us with our morning newspapers and pay with a $5 coin from the olympics series. he takes his change and then came in the next day with another $5 coin.

The shop owner has most of the complete collection now. He even explained that the coin was probably worth more than $5 but the guy didn't care.

 

[Yippe-Ki-Ya]

try taking it to the bank and see what they give you for it ;-)

and thats the beauty of PMs - the banks can get stuffed!

 

[Yippe-Ki-Ya]

I believe that it's legal tender value is whatever the spot value of the metal is at that time.
I guess the Mexicans are way ahead of the west in this regard ...

But not so far ahead of the South Africans...

oh? how so?

 

[Yippe-Ki-Ya]

Formally, it is anything which when offered in payment extinguishes the debt

ref: wikipedia

Worth noting: it has to be accepted before the debt ceases to exist completely.

If its legal tender it HAS to be accepted

 

[Big A.D.]

I believe that it's legal tender value is whatever the spot value of the metal is at that time.
I guess the Mexicans are way ahead of the west in this regard ...

But not so far ahead of the South Africans...

oh? how so?

South Africa released the Krugerrand in 1967 with no face value.

 

[Big A.D.]

Formally, it is anything which when offered in payment extinguishes the debt

ref: wikipedia

Worth noting: it has to be accepted before the debt ceases to exist completely.

If its legal tender it HAS to be accepted

See: http://www.rba.gov.au/banknotes/legal-framework/

 

[Yippe-Ki-Ya]

Yippie you are confusing even me. The legal tender is not spot at all. Legal tender means that the face value of the coin must be accepted as form of payment in the country that the coin is legal tender in. So a 1 ounce coin with a face value of $1 is only legal tender as $1. if what I think you are saying is true then you could walk into your news agent with a 1oz kook and buy $38.40 (current spot) worth of goods. That is not correct.

So to say the absolute minimum value is spot is not correct. If it is being sold as 1oz of silver then it is worth what someone is willing to pay for it and what one is willing to sell. If it's used as currency then it is worth $1 no more no less.

you are 100% correct mate - except for the particular Mexican coin to which i was referring...

It is a world leader in that it has no face value - and its value is whatever the metal value is at the time.
Which is why i said that Mexico is leading the way in this regard - accepting gold and silver for what it is - REAL MONEY!

 

[Yippe-Ki-Ya]

Worth noting: it has to be accepted before the debt ceases to exist completely.

If its legal tender it HAS to be accepted

See: http://www.rba.gov.au/banknotes/legal-framework/

thanks for that - it pretty much supports what i've said.
yes - it may not be unlawful to refuse legal tender, but it would be pretty dumb as the person would then have a very hard time in enforcing payment afterwards...

so in effect it boils down to : oh okay, you're not accepting my legal tender for the amount i owe you, so thanks for writing the debt off mate - its been a pleasure doing business with you! :lol:

 

[Yippe-Ki-Ya]

But not so far ahead of the South Africans...

oh? how so?

South Africa released the Krugerrand in 1967 with no face value.

that's true, but it was never afforded the official status of "legal tender" ...

The coin in Mexico has.

But those were different times... Back then the Rand was actually backed by gold.

 

[Big A.D.]

oh? how so?

South Africa released the Krugerrand in 1967 with no face value.

that's true, but it was never afforded the official status of "legal tender" ...

The coin in Mexico has.

But those were different times... Back then the Rand was actually backed by gold.

The Krugerrand was, and still is, legal tender in South Africa for whatever one ounce of gold happens to be worth on the day.

 

[Yippe-Ki-Ya]

Worth noting: it has to be accepted before the debt ceases to exist completely.

From what I understand, if you offer legal tender to pay off a debt and it is turned down then the debt is cancelled. If you offer silver coins and they are turned down then the debt still stands. You cannot offer to pay with one million 1 cent coins though, there are limits to the amount of coins that can be offered in payment of debts.

Also you can pay all your taxes and council debts with legal tender including the shiney 1 ounce coins or even the 1966 50 cents, however they are only accepted at face value.

That's not actually correct (in Australia at least): debts created via private transactions can be offered to be settled with any form of payment and the debt is only extinguished when the payment is accepted.

(The alternative would be if I owed you $50 and said "I'll give you a $50 note", you agreed and then I said "Hey, I only have to offer you a $50 note but I don't have to actually give it to you, so I don't owe you anything now".

Coins (in Australia) actually cease being legal tender in certain quantities. More than $5 in 5c, 10c, 20c and 50c is not legal tender. More than $10 in any quantity of coins is not legal tender either. Again, one party to a private transaction may accept them if they want to, but it isn't required. Businesses aren't even required to accept physical currency if they don't want to either.

I sincerely doubt that to be true. unless they're willing of course to write off the debt

 

[Yippe-Ki-Ya]

South Africa released the Krugerrand in 1967 with no face value.

that's true, but it was never afforded the official status of "legal tender" ...

The coin in Mexico has.

But those were different times... Back then the Rand was actually backed by gold.

The Krugerrand was, and still is, legal tender in South Africa for whatever one ounce of gold happens to be worth on the day.

thanks for that mate - you've certainly taught me something today!

I didn't realise just how ahead of the curve South Africa was! Pity how it's gone to the dogs now...

 

[Big A.D.]

I sincerely doubt that to be true. unless they're willing of course to write off the debt

Call the Perth Mint and ask them if you can mail them a bundle of used $5 notes.

 

[Yippe-Ki-Ya]

I sincerely doubt that to be true. unless they're willing of course to write off the debt

Call the Perth Mint and ask them if you can mail them a bundle of used $5 notes.

I don't know about mailing it to them, but what i do know is if i walk into their offices with legal tender bank notes and they refuse to accept them - i'm going to be a very happy person! Especially if i already have the bullion or whatever i owe them the money for...

 

[alor]

legal tender, just go and find Australian one. it is country specific.

below is USA

5103. Legal tender
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.

http://www.law.cornell.edu/uscode/usc_sec_31_00005103----000-.html
__________________

 

[alor]

I sincerely doubt that to be true. unless they're willing of course to write off the debt

Call the Perth Mint and ask them if you can mail them a bundle of used $5 notes.

I don't know about mailing it to them, but what i do know is if i walk into their offices with legal tender bank notes and they refuse to accept them - i'm going to be a very happy person! Especially if i already have the bullion or whatever i owe them the money for...

what is the reason for refusal?

"stolen money" or "money that they believed to be involved in money laundering activities"
then the burden of proof lies with you?

 

[errol43]

You know how the silver coins are 'legal tender' - does that mean they are worth their weight or the denomination on the coin. e.g. is the 1oz silver coin only a $1 or does it just mean the coin can be used for legal money based on its silver value?

It means the coins are "money" to the value of whatever is stamped on the back. They are also a commodity to the value of whatever the spot price is. In addition to that, they actually sell for whatever the market is prepared to pay for them.

A 1oz Kookaburra, for example would currently be:

Legal tender value = $1.00
Metal value = $38.50
Market value = $46.00

$10 State Series Coins ASW 5.9oz

Legal tender value =$10
Metal value = $22.90
Market value = $23/$24

I stack these a lot whenever I can find them FTF..I like NT & ACT ones as they are of lower mintage. Proofs are no dearer than U/C.Some of the bird series $10 coins have very low mintages and you can also get the 1.2 oz piedforts proofs for around spot. What a bargain. If silver ever drops to around $18 you will still get around spot even at the bank as they are legal tender for $10.

Can't understand why they are not more popular like the round 66 and the crowns as well as pre decimal. Oh the less in the market the cheaper it is for me to buy but alas another big buyer has moved in and takes everyone he can get from the same seller.


Anyway everystacker does their own thing but maybe it could be one way for new stackers to buy coins at near spot prices.

Regards Errol 43

 

[alor]

You know how the silver coins are 'legal tender' - does that mean they are worth their weight or the denomination on the coin. e.g. is the 1oz silver coin only a $1 or does it just mean the coin can be used for legal money based on its silver value?

It means the coins are "money" to the value of whatever is stamped on the back. They are also a commodity to the value of whatever the spot price is. In addition to that, they actually sell for whatever the market is prepared to pay for them.

A 1oz Kookaburra, for example would currently be:

Legal tender value = $1.00
Metal value = $38.50
Market value = $46.00

$10 State Series Coins ASW 5.9oz

Legal tender value =$10
Metal value = $22.90
Market value = $23/$24

I stack these a lot whenever I can find them FTF..I like NT & ACT ones as they are of lower mintage. Proofs are no dearer than U/C.Some of the bird series $10 coins have very low mintages and you can also get the 1.2 oz piedforts proofs for around spot. What a bargain. If silver ever drops to around $18 you will still get around spot even at the bank as they are legal tender for $10.

Can't understand why they are not more popular like the round 66 and the crowns as well as pre decimal. Oh the less in the market the cheaper it is for me to buy but alas another big buyer has moved in and takes everyone he can get from the same seller.


Anyway everystacker does their own thing but maybe it could be one way for new stackers to buy coins at near spot prices.

Regards Errol 43

this legal tender can be used to pay wages in a private transactions, and the party that accept it need to report income earned based on the face value.

 

[Yippe-Ki-Ya]

Call the Perth Mint and ask them if you can mail them a bundle of used $5 notes.

I don't know about mailing it to them, but what i do know is if i walk into their offices with legal tender bank notes and they refuse to accept them - i'm going to be a very happy person! Especially if i already have the bullion or whatever i owe them the money for...

what is the reason for refusal?

"stolen money" or "money that they believed to be involved in money laundering activities"
then the burden of proof lies with you?

No it does not. The burden of proof always lies with the party making the accusation.

 

[Big A.D.]

I sincerely doubt that to be true. unless they're willing of course to write off the debt

Call the Perth Mint and ask them if you can mail them a bundle of used $5 notes.

I don't know about mailing it to them, but what i do know is if i walk into their offices with legal tender bank notes and they refuse to accept them - i'm going to be a very happy person! Especially if i already have the bullion or whatever i owe them the money for...

If it's legal tender, it shouldn't matter whether you walk up to the counter or stick the money in an envelope though, right?