Utah to accept gold & silver bullion as currency

Utah is now accepting gold and silver as legal tender for transactions and to settle debts according to a bill recently signed into law by Governor Gary R. Herbert. Several other states have proposed similar measures in the wake of the monetary policies of the Federal Reserve and the decreasing value of paper money.

Utah’s law is notable because it is the first such bill to pass. Over 150 years ago Congress passed the Legal Tender Act which authorized the use of paper notes to pay bills and while paper money still retains the value noted, interest rates governing bonds and other savings or investment vehicles are at historic lows and are expected to remain at those lows through at least 2014.

Article: http://civsourceonline.com/2012/04/19/utah-to-accept-gold-silver...
Bill: http://le.utah.gov/~2012/bills/hbillint/hb0157.pdf

I'm sure a FW'er can somehow profit from this. Maybe Delzy? Interesting quote here too:

The state will also be offering a one-time tax credit to offset any capital gains taxes accrued for individuals who choose to trade metal for paper.

this has fail written all over it

So basically they're offering to act as a dealer, accepting the gold rather than making you sell it somewhere else first. I dont see the big deal, aside from the credit to offset any capital gains on the gold.

Glitch99 said:   So basically they're offering to act as a dealer, accepting the gold rather than making you sell it somewhere else first. I dont see the big deal, aside from the credit to offset any capital gains on the gold.

I wonder if it will indirectly kill the Cash4Gold places.

Glitch99 said:   So basically they're offering to act as a dealer, accepting the gold rather than making you sell it somewhere else first. I dont see the big deal, aside from the credit to offset any capital gains on the gold.Was the Utah government planning on hoarding gold? Do they already have a gold reserve? This will bite them in the ass when metals tank.

jkimcpa said:   Glitch99 said:   So basically they're offering to act as a dealer, accepting the gold rather than making you sell it somewhere else first. I dont see the big deal, aside from the credit to offset any capital gains on the gold.Was the Utah government planning on hoarding gold? Do they already have a gold reserve? This will bite them in the ass when metals tank.I bet they already have an arrangment to liquidate what they bring in, probably at the same value.

I see this as a good thing in that it gives people a place to unload their random gold knowing they arent being ripped off. Otherwise, it's inconsequential.

The only scenario I see precious metals tanking is if the US dollar gains some huge strength. So I can see the risk in not catching the appreciation of the US dollar, but I'd bet an ounce of silver, whether its market value is $35 or $17.50, will buy you ~10 gallons of gas. And with guys like Bernanke running the fed, and our two top POTUS candidates being big spenders, I'd think the chance of long term US dollar appreciation is quite small.

Seems a bit Tin Foil Hat to me.

I mean, US Mint American Eagle coins are already legal currency with a face value. I guess the big brother Utah state gov't wants to intrude in another area of life. Let the free market reign and leave your tax break in the black helicopter.

I'd rather have the Yen, Euro, and RMB as alternative currencies. Gold is too pretty to trade...not to mention the lack of any form of Cash Back.

Glitch99 said:   jkimcpa said:   Glitch99 said:   So basically they're offering to act as a dealer, accepting the gold rather than making you sell it somewhere else first. I dont see the big deal, aside from the credit to offset any capital gains on the gold.Was the Utah government planning on hoarding gold? Do they already have a gold reserve? This will bite them in the ass when metals tank.I bet they already have an arrangment to liquidate what they bring in, probably at the same value.

I see this as a good thing in that it gives people a place to unload their random gold knowing they arent being ripped off. Otherwise, it's inconsequential.I would hope so but I wouldn't give government officials so much credit. Always assume they will first act in a way that will benefit themselves the most, and in a way that will be most inefficient to taxpayers.

P3terGriffin said:   The only scenario I see precious metals tanking is if the US dollar gains some huge strength. So I can see the risk in not catching the appreciation of the US dollar, but I'd bet an ounce of silver, whether its market value is $35 or $17.50, will buy you ~10 gallons of gas. And with guys like Bernanke running the fed, and our two top POTUS candidates being big spenders, I'd think the chance of long term US dollar appreciation is quite small.Do you think US economy will stall out? If so, then the dollar will soar, and metals will tank. Don't confuse dollar strength with strength of the economy. Right now they are negatively correlated.

Does the state of Utah hoard every piece of paper money received in a vault? No? Then why expect they would do the same thing with gold?

Utah is now accepting gold as a medium of exchange.

svr411 said:   jkimcpa said:   Do you think US economy will stall out? If so, then the dollar will soar, and metals will tank. Don't confuse dollar strength with strength of the economy. Right now they are negatively correlated.

When the economy stalls out, again, Helicopter Ben will hit it with another blast of QE, sending metals up and the dollar down.Short of monetization, it's empty bullets. Interest rates have nowhere to go.

svr411 said:   jkimcpa said:   Short of monetization, it's empty bullets. Interest rates have nowhere to go.

What do you think they have been doing? The Fed has surpassed China as the largest holder of Treasury debt.You're preaching to the choir but publicly I like to at least pretend to be academic about it.

I'm sure the WalMart clerk will love the day when someone comes in with a pinch of silver shavings.

Does anyone know more details? If I owe $3000 on taxes and silver is $30, can I send in 100 american eagles? What happens when the price of silver decreases/increases in between mailing and receipt? What about pre 1965 silver coins?

larrymoencurly said:   Arizonans thank Utah and Florida for making Arizona not seem like the dumbest state in the USA.

I just moved to AZ not too long ago...what's wrong with us?

amhidogha said:   gremln007 said:   larrymoencurly said:   Arizonans thank Utah and Florida for making Arizona not seem like the dumbest state in the USA.

What did FL do?
Er, "Stand your ground", maybe?

Oh well, many states have that..

How does this compare with Pizza Patron accepting pesos for pizza?

Why would the state even want to do this? It seems like far more risk (and hassle) than it is worth.

Could the global metal consortium bankrupt the state of Utah by flooding the market? If they were inclined to do such things?

TheMeliorist said:   Again, I'm not talking about default. I'm talking about the owner of said treasuries effectively burning them (just like I can legally burn a $100 note I own); you can think of it however you like (ie the institution could redeem/sell the treasuries and then give/donate the proceeds to the Treasury). And yes, he did suggest they go poof, which is not any crazier than rolling them over forever (which I believe to be the real plan).The difference is that these special bonds can only be redeemed to pay SS and other social insurance benefits. So the SSA and Dept of Labor and Railroad administration don't "own" the bonds- the beneficiaries (us) do since we bought them with our payroll taxes.