bullion as insurance
The story of the 1st American flag is here
From the IRS web site: "To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary. Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit. Insurance - Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession".
Bar insurance narrative:
Insurance is a essential element for the survival of any business when something goes wrong. The tax code allows companies to buy insurance or to "reserve" money or warehouse assets off balance sheet to have reserves for such liabilities.
The constitution in Article I, section 10 reads "No state shall...coin money, emit bills of credit, make any thing but gold and silver a tender in payment of debts.." This means that the only constitutionally valid forms of money are gold or silver coin. This is called 'lawful money.' U.S. paper money used to be redeemable in lawful money, but no more.
Thus, in addition to the ability of a business to write off and establish off balance sheet reserves using reserve investments in fiat federal reserve notes also holds for deductible insurance reserves in bars of the lawful money of gold and silver.
This loophole has extra power now because nearly all banks and insurance companies are technically bankrupt as they hold their reserves in un-payable US government debt. Every business in America can fail if a major peril occurs and their insurance cant pay because their insurance company is broke or their money on deposit has been destroyed by hyperinflation.
Thus, EVERY business has an ordinary and necessary need to hold reserves for emergency AND insurance purposes in bars of real money aka: gold and silver. Bullion stands alone as the ONLY economically creditable way to insure the counterpart risk a hyperinflation will destroy the insurance, banks, and fiat money system your small business depends on to remain in business.
Employees will NOT show up to work, and suppliers will NOT deliver good or services to your company to earn money rendered worthless by a hyperinflation. They will demand payment in bullion they can then barter for goods & services just to show up for work or deliver.
The best way for a business to start a "metallica" self insurance program is to buy bars equal to all its insurance deductibles. After that bars are bought to raise deductibles further and peal away traditional insurance coverage until all liability is reserved in hard money the same way a pension fund is fully funded. Having many months of your typical payroll and suppliers bills in bullion is easily justified in this economic environment so full of hyperinflationary risks. Remember
The deductibility is reinforced in that the bars help all businesses hedge the risk of dollar collapse, FDIC insurance failure, and hyperinflation in the prices of the real goods firms need to buy to stay in business. Gold and silver bars are the only practicable way to hedge such risks and as such are deductible via many different justifications. Remember, an expense does not have to be indispensable to be considered necessary and therefore deductible.
The bottom line is that any firm from a sole proprietor to GE can in this environment buy UNTRACEABLE gold and silver bars as insurance in a well documented way amounts up to 100% of their profits expense them as business insurance and be confident that such deduction rests securely of a large number of reasons such self insurance expense is deductible.
A written "self-insurance" plan document is critical to your ability justify your write off bullion bars as insurance, written BEFORE you buy your first bar. Please email me at mailto: email@example.com if you would like more information about what should go in any "self-insurance" plan document you write.
If someday bars are sold back into fiat paper money to pay liabilities that would be a taxable event. If insurance bars are bartered or traded to "pay liabilities" or for business expenses, no visible taxable event would likely occur.
However, its also easy to see how in a small firms insurance bars over a long period of time can just melt into the owners personal holdings off the firms books in a way that is unseen by uncle Sam and untraceable by the IRS.