January 10, 2013 -- Issue No. 2

From the Owners

HAPPY NEW YEAR!!!

Well, Christmas, New Years, The Fiscal Cliff, and even Mayan Doomsday have come and gone.  Here we are in the first month of 2013, getting braced for the next crisis or disaster that all of here seem to agree is eminent.  But we’re not the only ones.  In the last few months, Rocklin Coin Shop has seen huge numbers of transactions, and record numbers of new customers.  I’d like to credit all those new customers to our advertising ventures, but as usual, we can credit more than 80% of our new customers to referrals from existing customers.  It’s the best type of advertising, and the one that reminds us that we’re doing a good job.  It’s also the reason why we started the newsletter, so that we could reward customer loyalty.  So, what’s good to know for this month?

The demand for silver is approaching record highs.  It’s not as high as we say in April of 2011, but we’re certainly getting back to a point where generic silver rounds are harder and harder to come by.  Currently, if we have to order silver rounds, we’re looking at 2-3 weeks for turnaround for orders less than 500 troy ounces.  Gold is still very easy to obtain quickly, and ten troy-ounce silver bars (one of our best sellers) don’t take nearly as long as silver rounds.  The added benefit is that they are slightly cheaper per ounce, but not so large that you tie up a huge amount of premium into a single item.

That said, keep in mind that when your order through us, as soon as we receive payment, your price is locked, so you don’t have to worry about fluctuations in the spot price during order processing affecting your purchase.

 COMING UP: Rocklin Coin Shop Projects

1)   We recently took a quick trip to Las Vegas as a side trip from seeing Matt’s dad in southern California.  Our kids have never been, and they were eager to see the buildings.  So, if you can handle taking a kid to Vegas, of course one of your stops will be the M&M store, where Ariana acquired some sparkling gold and silver M&M’s.  We plan to reward “in-shop” Newsletter Subscribers with a little bag of silver and gold M&M’s.  It’s not much, but its pretty sweet.

2)   Look for updates to our website.  I’ve been waiting to update our site for a long time, and in the next few months, we can hopefully make some big changes.

3)   Rocklin Coin Shop iPhone/iPad App.  Top Secret.  More to come.

We want to hear from you!!!

Input is always greatly appreciated.  Want us to write about something specific?  Have questions that you need answered right now?  Shoot us an e-mail at newsletter@rocklincoinshop.net.

Best Regards,

Matthew and Ariana Vickers
Owners – Rocklin Coin Shop

Of Zombies & Junk Silver

by Chad Vickers

In the 2009 Horror-Comedy “Zombieland,” Woody Harrelson’s character, Tallahassee, travels the remains of a zombie-infested America, in search of one of life’s last simple pleasures—a Twinkie. While the thought of America falling into a state of chaos due to a zombie infestation might seem far-fetched, the idea of our Country falling into chaos due to economic collapse is quickly becoming a reality. With government spending out of control, printing money is the only option to keep us from plunging head first off the next fiscal cliff.  When that fails to satiate our money hungry Government, the only option will be to destroy the dollar, and rebuild from scratch. Americans are facing a terrifying, and chaotic future, where life as we know it will be changed forever. Now, due to the bakers union strike a few months ago, and the subsequent closure of all Hostess factories, we will be left traveling through what is left of America without even the simple pleasures of a Twinkie to put our troubled minds at ease.

After the dollar is destroyed, what will follow will be madness. How will commerce continue when there is no more standard of trade? Sure, people will start a system of trade.

“I'll shoe your horse, if you give me a dozen eggs and some apples.”

But, not all of us can be farriers and farmers. How will we be able to pay for goods and services? What will happen then is what has happened for centuries before. People will start trading in precious metals, specifically Gold and Silver.

One of my favorite items to buy and sell in the shop is Junk Silver. For those who are unfamiliar, junk silver refers to quarters, dimes, and half dollars minted 1964 or earlier. These coins were minted before America went off of the “silver standard,” and contain 90% silver.  For every one-dollar in face value (two half dollars, four quarters, ten dimes, or any combination thereof) there is 0.72 troy ounces of silver. It is the cheapest silver that can be bought, and also provides a great way to buy precious metals in small increments. If we get to a point where silver and gold is being used to barter for goods, a troy ounce of silver will likely have an increased value, thus being able to purchase multiple goods and services. What happens when you need only some milk? At that point, a dime or a quarter will be a great item to have.

Come in to Rocklin Coin Shop today and get some great junk silver coins. Keep them as part of you disaster kit. Hopefully the time never comes that you have to use them, but if it does they will be there. They will help you find some calm and clarity in times of economic strife, and maybe you can even use them to barter for a Twinkie…unless you’re a Ding Dong person.

Coin Joke of the Month!

Guess the Punchline Edition!

A new game!  In “Guess the Punch Line” readers read the joke, and must guess the punch line of the joke.  Read the joke, and if you guess the punch line, send an e-mail to newsletter@rocklincoinshop.net  The first e-mail received with the correct punch line will win a $1 Silver Certificate.

“Today is finally the day,” though Ernie, a PCGS grading expert whose heart was filled with more excitement than he could remember.  For the first time, and probably the last time in his life, he was staring at a real 1876 CC Twenty Cent piece, and it was legit.  Only about twenty were known to exist, and he was the lucky guy to grade it.  His brow began to sweat with anticipation as he pondered which side of the coin he should examine first.  Obverse, or reverse?

 

How did he decide?

Covering More Than Our Own Ass(ets)

by Matthew Vickers

For the customers who know us, they know that we play by the rules.  However, ever since the presidential election, our phones here at the Rocklin Coin Shop have been ringing non-stop, and new customers coming in every day.  With the new activity, we’re seeing a pattern with clients who have worked with other coin/bullion dealers in the past…they want us to bend the rules.

Here’s a few of my favorite questions/comments of late:

“I’ve been doing business with [dealer] for years, and he’s never charged me sales tax.”

“Hey, [dealer] down in [shop] never charges sales tax.  He doesn’t report the sale on his books because he hates the government.”

“Why can’t you take/pay more than ten thousand dollars in cash at a time and just not tell anyone.  [Dealer] has been doing that for me for years.”

The Rocklin Coin Shop Newsletter provides me with the perfect opportunity to clarify the rules, why they exist, what you should be afraid of, and who’s really screwing you over—the guy who breaks the rules, or the guy who follows the rules.  First, let’s look at the applicable rules to buying/selling precious metals.

It’s no secret to most of us in the industry, and most of our customers, that one of the more desirable aspects of precious metals investing is the anonymity.  Most means of anonymity are legal, but there are certain rules and laws that all coin shop owners and precious metals dealers must follow.  Mind you, this article is not an endorsement of these laws and regulations.  I wholeheartedly believe these regulations have, at times, unnecessarily tied my hands and cost me a great deal of money.  Do not mistake conceptual understanding for endorsement. Let’s start by talking about sales tax assessment on precious metals sales.

Every state is different, but in California, any purchase of precious metals less than $1,500.00 is subject to state/local sales tax.  In Placer County, it is only the state rate of 7.5%.  Unless you are another retailer with a California State Sales Permit, we must charge you tax on any purchase from $0.01 - $1,499.99.  Why does this rule exist?

To tell you the truth, I’ve heard multiple explanations.  My favorite is that the state of California considers you a collector if you purchase less than $1,500 of coins or precious metals at a time.  Over $1,500, and they consider you an investor.  You can tax collectibles, but you can’t tax investments.  That seems logical, but I think that it’s much simpler than that—the state wants a piece of the pie.  The year before I bought Rocklin Coin Shop, the taxable purchase threshold was $1,000.  The rule changed just as precious metals started to become really popular, and my guess is that it will go up again before too long.  I’ll go into the importance of not breaking this rule (not just to save my butt) toward the end of this article.  For now, remember that if you cannot get to the $1,500 mark, you can round up some others to pool your funds. As long as it is a single transaction on my side, I’m doing nothing illegal by not charging sales tax on that sale.  That’s precious metals sales taxes in a nutshell, so let’s move on to the dreaded CTR.

Rocklin Coin Shop, as well as most other coin shops and precious metals dealers, buy and sell currency.  This means we are considered a financial institution and are required to register with FinCEN (the Financial Crimes Enforcement Network).  Registration requires us to have an internal anti-money laundering policy.  What the heck does that mean?  To answer, we need a brief history lesson on America’s most beloved and exciting topic—banking regulations!

The Bank Secrecy Act of 1970, known to financial institutions as the BSA, was enacted, primarily, to reduce money laundering.  The BSA has been amended several times since its inception, but, one aspect that has remained constant were the reporting requirements imposed on financial institutions.  The initiation of a Currency Transaction Report, or CTR, is required by any financial institution that has any cash transaction (deposit, withdraw, buy, sell, or exchange) that exceeds ten thousand dollars.  To be very clear, the CTR is not initiated at $10,000.00, but at $10,000.01.  What is a CTR?  What type of information does it collect?  Check it out for yourself and click here (http://www.fincen.gov/forms/files/fin8300_cashover10k.pdf) to see the actual form financial institutions submit to FinCEN.  In short, they collect everything but a blood sample.  Full name, date of birth, social security number, legal identification, employment information, etc.  Why?  The purpose of the CTR is to spot a money laundering transaction.  If you are depositing $50,000 cash into your bank account, but you don’t have a job, and the only ID you have is from Mexico, chances are you’re going to raise suspicions.  But, here’s why CTRs are ridiculous.

The dollar amount that triggers a CTR has not changed since its inception.    Why is this insane?  Simply put, it’s because of the huge difference between what $10,000 bought in 1970 and what $10,000 in 2013 can buy.  The problem is FinCEN is simply overrun with CTRs from so many financial institutions.  It has become impossible for them to look at more than a small percentage of reports.  In fact, they haven’t looked at most of them for some time.  Instead, they introduced an additional report called a Suspicious Activity Report (SAR).  It allows an employee of any financial institution with suspicion about a transaction to file a SAR in conjunction with a CTR or by itself.  They can request FinCEN look into the matter directly.  Obviously, the SAR is filed much, much less often than a CTR.  A CTR is only really looked at if there is a SAR that points to it.

Prior to working with “real” money, I was in retail banking operations for about ten years.  And, while I know a lot about CTR’s, the history of the BSA, the requirements for filing an SAR, and a whole bunch of other crap that could bore you to tears, what I know about better than anything are the penalties for failing to file (or incorrectly filing) a CTR—intentionally or accidentally.  One slip up, just one, and I could lose my business, be fined into oblivion, and/or face criminal prosecution.  If you look at the CTR form, you can see there is a lot of room for error.  That’s too much risk for me, so Rocklin Coin Shop’s internal anti-money laundering policy is summarized in one sentence.

“It is the policy of Rocklin Coin Shop that we shall not initiate or accommodate any cash transaction that exceeds ten thousand dollars, per customer, per day.”

Simple, right?  You bet it is.  But, the sad truth is that in this industry, I know of a handful of dealers who actively choose to violate this law.  They would rather take the big profits and the risk, rather than let the customer find another “less-than-ethical” dealer who is willing to openly violate the law.  Many of the potential customers who have challenged our decision to follow the law ask, “so what?”  Most take the position that the dealer who breaks the law is only putting himself/herself at risk, and if they (the customer) can benefit from that dealer’s unscrupulous activity, then why should they (the customer) care what law is being broken.

Setting aside moral relativism for a moment, and ignoring that these dealers are engaged in unfair business practices, there is a fairly simple answer to the “so what” crowd…guilty by association.

Reports are coming in that the feds are cracking down on coin dealers, in general, for legal and tax violations, especially those dealers who fail to file CTRs.  How do you suppose that investigators catch a dealer violating CTR regulations if the dealer never records the transaction?  Typically, by observation.  Guess what happens if you are one of the customers “observed” on the other side of the counter willingly violating the law along with the dealer?  FinCEN is not typically known to be forgiving, and they are pretty big believers in the “ignorance of the law does not excuse” principle. 

We follow the rules at Rocklin Coin Shop.  We do this, admittedly, to protect ourselves, but also to protect our clients.  We pay our taxes; we pay our employees through standard payroll.  We report our sales to the Board Of Equalization.  Uncle Sam has no reason to go through our records.  Uncle Sam has no reason to know our customers’ names.  Even so, if Uncle Sam showed up, he wouldn’t find anything to investigate, because we’ve obeyed the law…as ridiculous as we find many of them.  We’re safe.  We’re innocent.  And by association, so are our clients. 

This Month's Prize!!!

As you probably know, all subscribers to the Official Rocklin Coin Shop Newsletter earns you automatic entry into our monthly prize giveaway.  For this month, we are looking at a delightful prize.  It was silver last month, so this month it’s GOLD!!!  The winner of this month’s drawing will be the lucky recipient of a 1/20th ozt Chinese Gold Panda, and a 1 gram Credit Suisse gold bar.  The drawing will take place by the end of the month.

We will do the drawing (via random number generator) at the end of the month, and contact the winner by e-mail.

Good Luck!!

Rocklin Coin Shop Staff

Meet the Crew!

In this Newsletter, we introduce the Sales Manager of Rocklin Coin Shop, Chad Vickers.  Chad grew up in Yucaipa, CA, and moved to Northern California to work at Rocklin Coin Shop in November of 2010.  He is currently engaged to be married on September 1st of this year and spends most of his free time with his fiance, April, and their two children.  His hobbies include watching movies, playing basketball, drumming, grilling, and long bow archery.

His favorite thing about working at Rocklin Coin Shop is providing customers with bullion investment options that are suited to their specific needs.  His least favorite thing to do is to write short bios about himself.

At the shop, Chad specializes in making sure that customers are well educated before they put their hard-earned money into our shiny objects.  He is a problem solver, and has become well known for finding unique solutions to help satisfy the needs of our customers.

WE WANT TO HEAR FROM YOU!

Have something to add to our conversation?  Want to get our opinions or insight on something specific.  Want to give us suggestions on products or supplies that you'd like to see stocked at the shop?  The success of any business comes from it's ability to listen to its customers.  We wouldn't be here if it weren't for you. E-mail us anytime at newsletter@rocklincoinshop.net.