Minnesota lawmakers have passed legislation that will make it easier to track and regulate bullion coin dealers in that state. There is a lot of controversy over this legislation because some feel that it is not very enforceable, while others say it is meant to keep up-and-coming businesses from, well, up-and-coming. Still others say that the entire conversation is pointless because the state’s fraud laws are sufficiently able to handle any issues that may arise with Minnesotan bullion dealers.
The first problem with this legislation is the wording. Lawmakers, in all their wisdom, define a bullion coin as a coin having “more than one percent by weight of silver, gold, platinum, or other precious metals” so a one-ounce coin that contained only one gram of gold would easily qualify as a bullion coin. Many certified rare gold coins contain 90 percent gold, and silver coins like Peace and Morgan dollars are 90 percent silver. So should a private seller of a Carson City silver dollar or a 1907 High Relief Saint Gaudens qualify as a bullion dealer?
Secondly, while the legislation aims to do some good it is really nothing more than a way to collect some money (dealers and their reps will be charged an annual registration fee of $25 and $10, respectively) because scammers will always be scammers and fraudsters will always be fraudsters. Ignorant investors who don’t think to look at a company’s longevity and Better Business Bureau reputation lose millions each year on overpriced and counterfeit coins. By conducting some due diligence it is not that difficult to find a reputable certified coin dealer.