Official: Gold, Silver Now Legal Tender in Utah

[FrankRep]

http://www.thenewamerican.com/images/stories2011/10aMarch/goldcoins-t.001.jpg



With Governor Gary Herbert's signature on March 25 on the Utah Legal Tender Act, the state of Utah became the first in recent times to officially accept gold and silver coins as legal tender at their true value.


Gold, Silver Now Legal Tender in Utah (http://www.thenewamerican.com/index.php/economy/markets-mainmenu-45/6894-gold-silver-now-legal-tender-in-utah)


Alex Newman | The New American (http://www.thenewamerican.com/)
29 March 2011


Related News:

Tennessee Considering Gold, Silver as Legal Tender (http://www.thenewamerican.com/index.php/usnews/constitution/6880-tennessee-joins-states-considering-alternate-currency-legislation)

Virginia Considers Dollar Collapse, Gold Currency (http://www.thenewamerican.com/index.php/economy/economics-mainmenu-44/5951-virginia-considers-dollar-collapse-gold-currency)

North Carolina lawmaker wants state to produce its own currency (http://www.miamiherald.com/2011/03/17/2119523/nc-lawmaker-wants-state-to-produce.html)

[South Park Fan]

While this is a good start, Gresham's Law ensures that the worthless dollar will still reign until its legal tender status is scrapped.

[emazur]

Just came here to post this - I'm surprised it took 4 days for news of this to reach this site. This is good news, but there is a downside that Utah can't be blamed for:

In essence, the bill legalizes currency competition in Utah by removing punitive state taxes on individuals and businesses trading in precious-metal coins. Among the taxes that federally minted gold and silver coins are now exempt from are state sales and capital gains. Federal taxes, however, still apply — despite the U.S. Constitution’s clear language stating that no state shall make anything except gold or silver a tender in payment of debts.
Maybe I'm confused though - why does it say "federally minted gold and silver coins"?

[nobody's_hero]

Good point, emazur. Next is a bill that asserts that the Feds can't tax currency.

You don't pay taxes on dollars. You pay taxes in dollars (or lost dollar value, via inflation, but that's another matter, I think).

By the same token, it could be argued that you shouldn't pay taxes on gold, but with gold.

[FrankRep]

While acknowledging the limited effects of the bill for now, observers still commented on the powerful message it sends to the central bank. “This proto-gold standard in the American west is a rebuke and challenge to the Fed, and a reminder that easy monetary policy since 2007 has won the central bank many more enemies than friends,” noted (http://www.midasletter.com/index.php/utah-returns-to-gold-standard-in-defiance-of-fed/) analyst James West in a piece for the Midas Letter.

[RileyE104]

Awesome.

[Chester Copperpot]

While this is a good start, Gresham's Law ensures that the worthless dollar will still reign until its legal tender status is scrapped.

Gresham's law only apply when currencies of different value are forced to trade at the same price.. if a $20 gold coin is able to be accepted with a face amount of its gold worth then it will be traded amongst the people with no problem from the paper dollar

I can take a silver dollar and buy a pizza in utah now.

[Brooklyn Red Leg]

How long before the SCOTUS rules this unConstitutional? How long before the Justice Department and Treasury Department invade Utah and seize anyone who uses gold/silver tender?

[eduardo89]

Could you ask for tax credits and rebates to be given to you in gold instead of FRN's? :p

[nobody's_hero]

Gresham's law only apply when currencies of different value are forced to trade at the same price.. if a $20 gold coin is able to be accepted with a face amount of its gold worth then it will be traded amongst the people with no problem from the paper dollar

I can take a silver dollar and buy a pizza in utah now.

Good lord! That must be some good pizza for ~$30!, lol

[nobody's_hero]

Let's open a sound money bank in Utah, and watch the economy explode. (of course, by 'explode', I mean, grow at a realistic and sustainable rate dictated by decentralized market forces as economies should)

[Michigan11]

Hell yeah, a great victory for not only Utah, but freedom taking inches away from tyranny! The Revolution is slowly but surely getting a foothold in to begin to go from defensive to the offensive... Great News!

[South Park Fan]

Gresham's law only apply when currencies of different value are forced to trade at the same price.. if a $20 gold coin is able to be accepted with a face amount of its gold worth then it will be traded amongst the people with no problem from the paper dollar

I can take a silver dollar and buy a pizza in utah now.

Yes, but gold and silver are inevitably going to outpace the worthless dollar in terms of long-term value. While today the silver dollar and its monetary equivalent in fiat currency may be worth the same, that may not be the case a year from now. You would be foolish to spend precious metals on everyday transactions when one could just as easily pawn off fiat currency on someone forced to accept it. The only catch seems to be that one would not have to pay state taxes on transactions made in gold or silver, so it could work if the state income tax is higher than the inflation rate.

[heavenlyboy34]

thanks...nice to get good news once in a while. :)

[lx43]

Another article. http://money.cnn.com/2011/03/29/news/economy/utah_gold_currency/index.htm

[iamse7en]

Maybe I'm confused though - why does it say "federally minted gold and silver coins"?

Only a softer version of this bill could get passed. Only U.S. Mint gold/silver coins are accepted, which is a serious flaw. However, this is on the right track. Definitely raising eyebrows around the nation and getting states to discuss alternative currencies. The bill's author originally wanted include more than just U.S. Mint coins, e.g. Canadian, Australian, etc minted coins - or perhaps privately minted coins, e.g. APMEX or Sunshine silver rounds. The Federal Government still has too much control with this bill, but it's a step in the right direction.

[Zippyjuan]

Curious as to just how this works. Say I am a business. I decide to accept gold or silver coins for payment. Is there a fixed exchange rate or do I have to daily track the value of gold and silver and calculate payment for each and every customer every day? Do I give change in FRNs or more silver? Federal taxes still apply. Do I have to pay federal tax on the gold coin I accepted? That means I get less than if I took dollars if that is so. How do I record the payments for my books? Do I record the value of the gold coin? Do I have to convert the value that day or use some monthly or weekly value for gold? What do I do with the gold or silver? The banks will not accept them for deposit like cash so I have to either convert them to dollars or store them. This costs me more money and time. It is cheaper and easier to just keep using FRNs. I already have systems in place to handle them.

[JCLibertarian]

I don't see why anyone would want to pay state taxes in gold or silver, but I guess I agree with the spirit of the law.

[nobody's_hero]

Curious as to just how this works. Say I am a business. I decide to accept gold or silver coins for payment. Is there a fixed exchange rate or do I have to daily track the value of gold and silver and calculate payment for each and every customer every day? Do I give change in FRNs or more silver? Federal taxes still apply. Do I have to pay federal tax on the gold coin I accepted? That means I get less than if I took dollars if that is so. How do I record the payments for my books? Do I record the value of the gold coin? Do I have to convert the value that day or use some monthly or weekly value for gold? What do I do with the gold or silver? The banks will not accept them for deposit like cash so I have to either convert them to dollars or store them. This costs me more money and time. It is cheaper and easier to just keep using FRNs. I already have systems in place to handle them.

Well, if you were a savvy businessman, you should be tracking the (declining) purchasing power of dollars and adjusting your prices accordingly, anyway. We're seeing this most obviously with groceries at the moment, but the effects of inflation will not lag for long in other areas.

You might find that you're already costing yourself money, if not time, by continuing to use FRNs.

Let's say that you have a good priced at $30 U.S. FRN or $1 (silver morgan or peace coin). At first you might see this as a hassle. 6 months later, the price of silver doubles.

So, let's assume that you haven't been keeping up with the FRN's true value. Those six months later, you've still got goods priced at $30 FRN which you've just realized you've been selling under-priced, because silver is indicating that you've been screwing yourself by pricing goods too low.

Remember, silver and gold has a relatively fixed value compared to the fiat dollar. With that point in mind, you aren't adusting your store's prices in silver or gold to reflect the dollar, you're actually calculating the dollar's value relative to the price of silver/gold. This is why many businessmen (especially small businessmen) don't realize they're being screwed.

[Stary Hickory]

I can take a silver dollar and buy a pizza in utah now.

All hope is not lost, I am so happy that Utah did this. The sky will not fall and impending doom will not descent upon us all...people just have the choice to trade in a currency that cannot be debased.

[nobody's_hero]

I don't see why anyone would want to pay state taxes in gold or silver, but I guess I agree with the spirit of the law.

The state has to pay out in gold/silver as well (if available). That was the point of the bill, to realign the state to the Constitution's literal meaning: "The state shall make no thing, except gold or silver, legal tender in payment of debts."

[JCLibertarian]

If Utah legalized polygamy and legalized Marijuana, I might have to leave California and move to Utah.

[Keith and stuff]

I can take a silver dollar and buy a pizza in utah now.

You aren't any more likely to be able to do that now in UT than you were before this bill passed.

[Keith and stuff]

If Utah legalized polygamy and legalized Marijuana, I might have to leave California and move to Utah.

That is a long time coming. It doesn't appear as though any state in the county is anything close to legalizing either of those things. Of course, I've never heard of anyone moving to UT for liberty either. However, plenty of people move to states near UT for increased liberty.

[Stary Hickory]

You aren't any more likely to be able to do that now in UT than you were before this bill passed.

Give it time, things don't change overnight, but I like it this way. Naysayers can say nothing about this law, it does not threaten anyone, it does not cause the sky to fall, people without silver or gold are not suddenly turned into paupers. All the language and arguments against this law have been proven to be simple hysteria. And in the long run people can utilize a more stable currency bit by bit.

[Keith and stuff]

Curious as to just how this works. Say I am a business. I decide to accept gold or silver coins for payment. Is there a fixed exchange rate or do I have to daily track the value of gold and silver and calculate payment for each and every customer every day? Do I give change in FRNs or more silver? Federal taxes still apply. Do I have to pay federal tax on the gold coin I accepted? That means I get less than if I took dollars if that is so. How do I record the payments for my books? Do I record the value of the gold coin? Do I have to convert the value that day or use some monthly or weekly value for gold? What do I do with the gold or silver? The banks will not accept them for deposit like cash so I have to either convert them to dollars or store them. This costs me more money and time. It is cheaper and easier to just keep using FRNs. I already have systems in place to handle them.

It is based on FACE value. So if the coin has $1 on it, it is worth $1.


As currency, the gold and silver coins, which are usually purchased by individuals as investments, are still only worth their face value in the eyes of the state.

So even if the actual precious metal in your $50 coin has a market value of $1,400, it still only has $50 dollars worth of purchasing power.

[TexanRudeBoy]

Doesn't this make the entire state of Utah "economic terrorists"?

[Stary Hickory]

Doesn't this make the entire state of Utah "economic terrorists"?

In the eyes of the FED, YES

[erowe1]

//

[nobody's_hero]

I still think Utah needs a bank that deals in Gold/Silver to start the ball rolling in the private sector. I'd invest in such a venture, if I had any money to invest, but undoubtedly, the Feds would shut me down for 'interstate commerce' if I tried to do anything from Georgia.

[Zippyjuan]

It is based on FACE value. So if the coin has $1 on it, it is worth $1.

Cool. I will give you change for that $25American Eagle gold piece in your pocket (or safe). Heck- I will offer you FIVE ten dollar bills in change- double your money! If you are willing to use them that way at my business, I will see that the boss gives you half off everything.

http://coins.coinupdate.com/wp-content/uploads/2008/12/gold-eagle.jpg
http://coins.coinupdate.com/american-gold-eagle-coins/

[Agorism]

What we really need is some sort of banking system that does not leave a paper trail for the gumbit to follow and also only has 1:1 reserves.

[dude58677]

I can pay for bobsled rides in Park City, Utah using gold and silver!

[LibertyRevolution]

I don't understand why anyone would use precious metal coins at face value...
You would be taking one hell of a hit buying a $15 pizza with 15 silver eagles... $600 pizza.

[FrankRep]

Gold, silver coins to be legal currency in Utah (http://hosted.ap.org/dynamic/stories/U/US_BACK_TO_GOLD?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-05-22-15-23-20)


Associated Press
May 22, 2011



SALT LAKE CITY (AP) -- Utah legislators want to see the dollar regain its former glory, back to the days when one could literally bank on it being "as good as gold."

To make that point, they've turned it around, and made gold as good as cash. Utah became the first state in the country this month to legalize gold and silver coins as currency. The law also will exempt the sale of the coins from state capital gains taxes.

Craig Franco hopes to cash in on it with his Utah Gold and Silver Depository, and he thinks others will soon follow.

The idea is simple: Store your gold and silver coins in a vault, and Franco issues a debit-like card to make purchases backed by your holdings.

[hazek]

Nice.