Utah Embraces Gold and Silver as Currency

May 23rd, 2011

The Utah Gold and Silver Depository is an interesting idea, but remember how fractional reserve banking got started in the first place? That’s right: Gold depositories started issuing paper promissory notes that people used instead of their actual gold. The depositories noticed that only a small number of notes were redeemed in the physical gold. It wasn’t long before loans were being issued that totaled many multiples of the value of the actual gold that was kept on hand (with disastrous results). This process has metastasized to the point where there’s now no gold, or anything else with intrinsic value, backing national currencies.

I’m not saying that something like the Utah Gold and Silver Depository is a bad idea, but people will need to make sure that it (and similar businesses) NEVER engage in any lending or credit related services. If they did, that would be a sure sign that the proprietors were engaging in the same old black magic swindle that has delivered us to the brink of oblivion.

Via: Houston Chronicle / 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.

He plans to open for business June 1, likely the first of its kind in the country.

“Because we’re dealing with something so forward thinking, I expect a wait-and-see attitude,” Franco said. “Once the depository is executed and transactions can occur, then I think people will move into the marketplace.”

The idea was spawned by Republican state Rep. Brad Galvez, who sponsored the bill largely to serve as a protest against Federal Reserve monetary policy. Galvez says Americans are losing faith in the dollar. If you’re mad about government debt, ditch the cash. Spend your gold and silver, he says.

His idea isn’t to return to the gold standard, when the dollar was backed by gold instead of government goodwill. Instead, he just wanted to create options for consumers.

“We’re too far down the road to go back to the gold standard,” Galvez said. “This will move us toward an alternative currency.”

Posted in Economy, Elite | Top Of Page

One Response to “Utah Embraces Gold and Silver as Currency”

  1. Dcn Joseph Suaiden Says:

    “I’m not saying that something like the Utah Gold and Silver Depository is a bad idea, but people will need to make sure that it (and similar businesses) NEVER engage in any lending or credit related services.”

    Already is. According to the IC structure, a VS/MC debit is around a 1.03% rate.

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