Monday, May 30, 2011

Preparations Being Made For Using Gold And Silver In Utah

Now that the Utah Legal Tender Act of 2011 is law, some preparations are being made to use gold and silver as money. Craig Franco, a coin dealer, is making arrangements with a bank to set up a debit system so people can use gold and silver to make purchases. The Old Glory Mint, in Spanish Fork, Utah, has issued a commemorative silver round featuring a depiction of the Mormon "Miracle of the Seagulls."
So far, there hasn't been much of a rush to use gold or silver. Part of the reason is the presence of the federal capital gains tax on gold and silver.
But here in Farr West, about 40 miles north of Salt Lake City, there is at least some precedent for such transactions.

Decades ago, the rambling Smith and Edwards store, a kind of giant 7-Eleven from the Old West that sells everything from survival kits to sporting goods and copies of the Constitution, had a special sale, offering a very favorable rate if people made purchases with “junk silver” dollars and half dollars. In the 1980s, the store sold a man a $1,200 air compressor for a little less than 4 ounces of gold, recalled Bert Smith, one of the owners, who is now 91.

Mr. Smith said that he liked the new law, and that he was ready to accept silver and gold. But he does not expect to see much brought to his registers.

“I don’t suppose there’s going to be a big run on it,” Mr. Smith said, “because people are going to hang on to their gold and silver more than ever.”

And, of course, the federal capital gains tax encourages them to do so.

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