Utah legalizes use of gold, silver as currency

Source: AP via Raw Story
By Kase Wickman

Utah this week became the first state to legalize the use of gold and silver coins as legal currency, the according to the Associated Press.

Republican state Rep. Brad Galvez sponsored the bill, which also excludes gold and silver from capital gains taxes, as a protest against Federal Reserve policies. Galvez said he didn't want a complete return to the gold standard, but wanted to give consumers more options.

"We're too far down the road to go back to the gold standard," Galvez told the AP. "This will move us toward an alternative currency."

The Utah Gold and Silver Depository will open June 1, and consumers will be able to store their gold coins there in exchange for a debit card that draws on their funds there. Merchants won't be required to accept gold coins, so the depository is the only way to guarantee the currency can be used.

More at: http://www.rawstory.com/rs/2011/05/23/utah-gold-standard-silver-currency/

At face value or what? This makes no sense. A pre-1964 dime is worth $2.50 (more or less).

Does the merchant also have to have a depository account? Does the amount available on your debit card vary with the current price of gold or silver?

It is just like owning a ETF based on gold such as GLD or IAU. It goes up and down based on the price of gold. Merchant just needs to be able to process debit cards which they all do now.

How else could you transfer an amount of gold or silver to them via a debit card?

Just like your debit card now. If you have a debit card with a specific bank the merchant does not need to have an account at the bank. The third party takes cared of the transfer of funds.

They're gold or silver, unless the proper amount is sold to some third party for dollars and those dollars are then transferred to the merchant.

If that's the case then you're not really paying in gold and silver, are you? So they aren't currency.

As opposed dollars based on the faith and credit of the federal reserve (a private company). As an investor in gold I have done quite well and would rather have my dollars based on that than based on Bernanke.

and then paying in those faith and credit based dollars. The merchant is not receiving dollars that are backed by gold or silver.

Not that I think this is a good idea, just that I don't think it really uses gold and silver as a currency.

So I don't know why some are so excited about this and even calling it illegal. The merchant is receiving dollars. He does not care if the dollars are from a bank account or dollars based on someone's gold holdings. It is all the same to him. It simply allows the gold owner to easily transfer his wealth to get items from a merchant.

The Federal government should act strongly to penalize Utah for doing this. Guys, we don't need anyone else fucking up our dollar any more- certainly not other states. This is a VERY serious development or, I should say, the beginning of one. We don't want to go down that road.

We don't want to go down that road.

PB

...cannot have states undermining the dollar in any way shape or form. I'm no currency expert but I'm already worried enough about the fate of the dollar in regards to the Euro and the Yuan (if the Chinese should ever stop holding it down)...and that's more than enough worries for everyone without some rogue state taking a swipe at the dollar. Seriously. As Biden would say, and in my opinion, "This is a big fucking deal."

Utah can go and be crazy and they can legislate whatever- but when that shit starts potentially eating into the worth of the dollars we use in the other 49 states, then that's too much.

PB

And now that I think of it, why should I have to trade my chicken for gold? I should be able to cut out the middle man and barter directly using my poultry. You know, like we all use to do for health care.

Some of the harder core "thug-life" poultry wears these gold chains as a sign of toughness.

PB

Thanks!

Just sayin. I know you boys already have helicopters and body armor.

PB

The Congress gets to mint and choose the value of money in America. When anyone or anything else attempts to inject itself as legal tender for debts public and private (as they say) there necessarily forms a competition between the interest of the new currency and the dollar. In such a terrible economic time, this move is nothing short of an actual attack on the worth of the US dollar.

And remember, this is not me and you working out a deal between us. This is recognition by a State Legislature of an alternative currency. Huge difference.

But they don't just stop there: By giving preferential tax treatment for gold and silver from state taxes, the Utahan legislators are openly attempting to tamper with the value of the dollar. Granted, no one is forced to use the new currency over the old but even creating a new "flavor" of currency could have a huge impact on the dollar.

Bad news. There is no Federal judge alive who's going to disagree with the Federal government when it comes to this issue. Anything else opens up a quasi-antebellum banking environment which would be disasterous (and that's an understatement).

If you still don't follow, understand the "gold" and "silver" could just as easily have been "chicken skulls" and "Pokemon cards". Just because they're gold and silver does not change the challenge to the dollar itself, or the authority of the Federal government.

PB

Congress does not choose value for money. The value of a dollar goes up or down every day. Congress mints coins not dollars. A private company prints dollars (the federal reserve) and chooses the value for them (the number they put in circulation) based on their board of governors. Congress/President has nothing to do with it.

There is no constitutional problem. I notice you did not cite any provision. This is not a competing currency. It is a debit card based on the value of the owners gold and silver. If debit cards are in violation as an alternative currency how come no on is going after the banks? You are saying it is wrong for state government to have a debit card but OK for private banks. It that you Timmy?

From Article 1, Section 8:


I should have known after your first two sentences- where you clearly don't know what the term "value" means in this context -that you had no idea what you were talking about and just stopped reading there. You're trying to use the very little knowledge you do have as a paddle to move around in an ocean of information you can't be bothered to learn.

PB

A private company prints dollars not the federal government. They and they alone determine its value. You still haven't said why a debit card violates this provision of the Constitution. Of course you can't because then you would have to explain why private bank debit cards are ok and you can't.

The Treasury prints and mints all paper currency and coins in circulation through the Bureau of Engraving and Printing and the United States Mint. The Department also collects all federal taxes through the Internal Revenue Service, and manages U.S. government debt instruments, with the major exception of the Federal Reserve System, a private corporation (Lewis v. United States, 680 F.2d 1239 (1982)).

The federal reserve determines how much money is printed and put into circulation. That determines its worth in relation to other currencies.

The basic functions of the Department of the Treasury include:

Managing federal finances;
Collecting taxes, duties and money paid to and due to the U.S. and paying all bills of the U.S.;
Producing all postage stamps, currency, and coinage of the U.S.;
Managing government accounts and the United States public debt;
Supervising national banks and thrift institutions;
Advising on domestic and international financial, monetary, economic, trade and tax policy – fiscal policy being the sum of these, and the ultimate responsibility of Congress.
Enforcing Federal finance and tax laws;
Investigating and prosecuting tax evaders;
Publishes statistical reports.

Put up all the cut and paste definitions that you want. The federal reserve determines how much dollars are produced -- not the Treasury.

"Each of the twelve Reserve Banks is authorized by the Federal Reserve Act to issue currency, and the Department of Treasury is authorized to issue coin. The Secretary of the Treasury approves currency designs, and the Treasury’s Bureau of Engraving and Printing prints the notes. The Federal Reserve Board places an annual printing order with the bureau
An important function of the Federal Reserve is ensuring that enough cash is in circulation to meet the public’s demand.
The Federal Reserve Board places an annual printing order with the bureau
and pays the bureau for the cost of printing. The Federal Reserve Board
coordinates shipments of currency to the Reserve Banks around the country.
The Reserve Banks, in turn, issue the notes to the public through
depository institutions. Federal Reserve notes are obligations of the
Reserve Banks. The Reserve Banks secure the currency they issue with
legally authorized collateral, most of which is in the form of U.S. Treasury
securities held by the Reserve Banks. Coin, unlike currency, is issued by
the Treasury, not the Reserve Banks. The Reserve Banks order coin from
the Treasury’s Bureau of the Mint and pay the Mint the full face value of
coin, rather than the cost to produce it. The Reserve Banks then distribute
coin to the public through depository institutions. " http://www.federalreserve.gov/pf/pdf/pf_7.pdf

:wow:

:evilgrin:

PB

Gold and silver pieces?

There's no paper currency being created. It's all electronic - on Debit cards.
No more or less of a risk than any debit card issued by a bank or credit union.

Are they ONLY going to accept coinage or can one use gold dust as well? Can you mint your own coins? The US Government no longer mints gold coins. Is Utah now going to begin miinting coins. If you are allowed to mint your own coins, there is no telling what could be inside those coins...

the entire state look like a bunch of drooling fools.

It's beautiful here but I think it may be time to get out of Dodge.

Black Friday, September 24, 1869 also known as the Fisk/Gould scandal, was a financial panic in the United States caused by two speculators’ efforts to corner the gold market on the New York Gold Exchange. It was one of several scandals that rocked the presidency of Ulysses S. Grant. During the reconstruction era after the American Civil War, the United States government issued a large amount of money that was backed by nothing but credit. After the war ended, people commonly believed that the U.S. Government would buy back the “greenbacks” with gold. In 1869, a group of speculators, headed by James Fisk and Jay Gould, sought to profit off this by cornering the gold market. Gould and Fisk first recruited Grant’s brother-in-law, a financier named Abel Corbin. They used Corbin to get close to Grant in social situations, where they would argue against government sale of gold, and Corbin would support their arguments. Corbin convinced Grant to appoint General Daniel Butterfield as assistant Treasurer of the United States. Butterfield agreed to tip the men off when the government intended to sell gold.

In the late summer of 1869, Gould began buying large amounts of gold. This caused prices to rise and stocks to plummet. After Grant realized what had happened, the federal government sold $4 million in gold. On September 20, 1869, Gould and Fisk started hoarding gold, driving the price higher. On September 24 the premium on a gold Double Eagle (representing 0.9675 troy ounces (30.09 g) of gold bullion at $20) was 30 percent higher than when Grant took office. But when the government gold hit the market, the premium plummeted within minutes. Investors scrambled to sell their holdings, and many of them, including Corbin, were ruined. Fisk and Gould escaped significant financial harm.

Subsequent Congressional investigation was chaired by James A. Garfield. The invesitigation was alleged on the one hand to have been limited because Virginia Corbin and First Lady Julia Grant were not permitted to testify. Garfield's biographer, Alan Peskin, however, maintains the investigation was quite thorough. Butterfield resigned from the U.S. Treasury. Henry Adams, who believed that President Ulysses S. Grant had tolerated, encouraged, and perhaps even participated in corruption and swindles, attacked Grant in an 1870 article entitled The New York Gold Conspiracy.

Although Grant was not directly involved in the scandal, his personal association with Gould and Fisk gave clout to their attempt to manipulate the gold market. Also, Grant's order to release gold in response to gold's rising price was itself a manipulation of the market. Grant had personally declined to listen to Gould's ambitious plan to corner the gold market, since the scheme was not announced publicly, but he could not be trusted. Gould had promoted the plan to Grant as a means to help farmers sell a bountiful 1869 wheat crop to Europe.<1>

:thumbsup:

PB