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.

Utah Gold Depository Opens On Heels Of Gold-Standard Law

Now that Utah has recognized gold and silver as legal tender in the state, entrepreneur Craig Franco is opening up the Utah Gold and Silver Depository to tap in to the anticipated demand to use gold and silver as money.

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 Minnesota legislature has already set up a committee to study the issue, and there's a push to have the U.S. government drop the caital-gains tax on gold and silver.


The latter would go a long way to facilitating the use of gold and silver as money, as capital-gains taxes inhibit the circulation (buying and selling) of the metals. Should the feds do so, gold and silver tender will take off.

Utah Gold Standard Bill Becomes Law, But May Be Less Than It Seems

Utah's governor has signed the gold-standard bill into law. But, according to a CNN Money report, he did so largely because it enacted tax relief and took a politically popular swipe at the Federal Reserve. U.S.-minted gold and silver coins are legal tender, but only at face value - not market value. Presumably, one of the tasks that the study committee the law authorizes will be how to adjust legal-tender tax rates to the market price of the metals. As for the capital-gains elimination, it does not nullify federal taxes. Those still apply, at collectible rates.

According to a person close to Herbert, the governor signed the bill because it eliminates capital gains taxes on a popular investment. The other stuff, not so much.

"If somebody is stupid enough that they want to buy a Snickers bar at 7-Eleven with a gold coin worth thousands of dollars, they will be able to do that," the source said.

The same source threw cold water on the idea that the study committee will go all the way in setting up gold and silver as full-fledged alternative currencies, claiming that there would be major constitutional issues that would get in the way.


Desite its limitations, it's still an important symbol and milestone. It certainly shows how much political gain can be mined by bearding Ben Bernanke. Given the passion behind the bill in the House, I think a sneak was pulled to get the Governor to sign. That source may scoff, but it's still law. How broad the study committee's mandate will be, is going to be the next political battle for the gold standard. Once the idea spreads, those limitations should largely dissolve.

Can't Win 'Em All, Even Though Won In One

Given the decades-long headwinds that the gold standard has faced, it was a real breakthough to see the Utahan legislature approve of gold-standard legislation and Utah's Governor sign the bill into law. Once the law is enacted, the state capital gains tax on the metals will be eliminated. Utahans will be able to buy and sell using U.S.-minted gold coins voluntarily. A committee will be set up that will determine how they can pay state taxes in gold and silver, and look at other means by which the metals can be used as money. The bill explicitly recognizes gold and silver Eagles as legal tender in the state.

In so doing, the Utahan goverment has rolled back an "advance" that has been in place since 1933. Believe it or not, it was illegal for U.S. citizens to buy and keep gold until 1975.

An important precedent at the state level has been set, but that doesn't mean other states are going to be following anytime soon. In Montana, House bill 513, which would have established a state reserve in gold and silver using the tobacco tax revenue stream and required dealing in gold and silver with some contractors and/or taxpayers, was defeated in a close vote of 52 to 48. Democrats, and many Republicans, voted against the measure. Amendments to include coal and copper were soundly defeated.


A shame, but Rome was not rebuilt in a day. The fact that the Montana house was close to approving it shows that state restoration of the gold standard is an idea whose time has come. The article indicates the kind of scare-talk that such initiatives call up: one Democrat intimated that the gold-standard bill was part of a secret plot pushing Montana to secession.

[Interesting role reversal, that. How does it feel to be on the inside of a purported conspiracy?]

Utah Remonetization Bill Rebuke To Federal Reserve

The bill remonetizing gold and silver is still being reviewed by Utah's governor, but it has passed both the House and Senate by healthy margins. It may survive a veto. Once it becomes law, Utahans will be able to use U.S. Eagles as money in shops. Since the bill is in conformance with a strict reading of the U.S. Constitution, no foreign gold bullion coins will be authorized as money. As an article in the Globe and Mail explains, this bill is a rebuke to the Fed.

“They’ve been a disaster,” says Jeff Bell, policy director of the American Principles Project, a conservative lobby group that has helped the Utah legislators and favours a return to the gold standard. “Mr [Ben] Bernanke, ever since he got on to the Fed, has been a force for fighting deflation and bringing interest rates down to the disappearing point.”...

The Fed is unpopular with the US public, and several other states have recently been considering – with varying degrees of seriousness – similar legislation to Utah’s.

From 2003 to 2009 the percentage of people saying the Fed does a “good” or “excellent” job fell from 53 to 30 per cent, according to Gallup. A Bloomberg opinion poll last year found that 16 per cent of Americans want to abolish the central bank outright – although it did ask a leading question.

The Fed's unpopularity may not matter, because it's designed to be an independent institution that takes the political fallout for bad economic times.


Thus, Congress will be reluctant to end the Fed even if a majority of voters approve abolition. Still, point man Ron Paul shouldn't be counted out: he's been continually underestimated, and has turned into quite the folk hero. He may have the clout someday.

Utah Senate Approves Legal-Tender Bill

In a swift and solid vote, the Utah state legislature has approved the bill that takes the first step to recognizing gold and silver as legal tender in the state. The vote was 16-7, so the bill passes to the Utah governmor for his signature.

The measure would recognize as legal tender gold and silver coins issued by the federal government — not just their face value, but also their value in gold and silver or to a collector.

It would not require anyone to accept them, however, but make it an option. It also would exempt sales of such coins from capital gains tax. It also would order the state to study whether Utah should establish an alternative form of legal tender, such as one backed by silver and gold.

"It will put some pressure on the federal government. That’s the goal here because right now we have a dollar that’s just running away with inflation and our hope is that this is a little bit of a shock that’ll say we want to deal with inflation," Senate Majority Leader Scott Jenkins, R-Plain City, Senate sponsor of the bill, said in earlier debate. He gave senators gold chocolate coins on Thursday before debate....

Utah's governor has little incentive to veto a bill that has strong legislative support, so it's very likely that this bill will become Utah law. There's a chance that it may be repealed, most temptingly during a precious-metals bear market, but if the Utah legislature sticks through the thin years it'll be a historic law. As noted in the article, it's a wedge law that prefaces full monetization of gold and silver in the state.

Now, that would be historic.

Utah Bill To Remonetize Gold, Silver Gets Preliminary Approval From Senate

It's moved one step closer to becoming a law that would make gold and silver alternate legal tender in the state of Utah. Although one critic carped about it, the preliminary approval kicked in with a solid vote of 21-4.

The Senate gave preliminary approval Wednesday to recognize gold and silver as legal tender in the state. But one critic suggested that maybe lawmakers should also consider allowing salt as legal tender, too....

The measure would recognize as legal tender gold and silver coins issued by the federal government — not just their face value, but also their value in gold and silver or to a collector, and exempt sales from personal gains tax. It also would order the state to study whether Utah should establish an alternative form of legal tender, such as one backed by silver and gold....

For a measure that would have would banished its proponents to the lunatic fringe only one generation ago, let alone two generations ago, its passage has been incredibly smooth. It stands as mute evidence to an amazing change to the U.S. political culture since 1985 or so. I'm quite sure Utah will go down in history for this bill.

Ron Paul's 2008 campaign had a lot to do with it, of course, but the underlying times have changed too. Rep. Paul ran for President in 1988 on the Libertarian ticket, and he got only 431,000 votes despite being endorsed by David Letterman and Timothy Leary. Twenty years later, he grabbed the spotlight as the chief alternative candidate for the Republican nomination. Times have turned to the point where it's semi-legitimate to be a libertarian, even in Washington D.C. The Ludwig Von Mises Institute and LewRockwell.com, both of which had a major hand in the libertarian explosion, have a popularity almost unimaginable in the '80s. Sadly, Murray N. Rothbard went to his final rest in 1995.

Utah Lower House Approves Gold, Silver Monetization

As reported by the New American,

The Utah House of Representatives voted on March 4 to make gold and silver coins issued by the federal government into legal tender within state borders, prompting praise from sound-money advocates across the nation. The legislation will now be taken up by the state Senate.

In addition to possibly making precious-metal coin lawful money for intrastate and government transactions, the bill would exempt gold and silver from state sales, income, and capital-gains taxes. The legislation also states that individuals cannot be compelled to accept precious metals instead of Federal Reserve Notes. It was approved in the House with a vote of 47 to 26....

It's certainly precedent-setting, although not yet law. Ironically, a guide to what might happen is Prohibition. An alcohol ban was first enacted by the state of Kansas in 1881, and migrated to other states before becoming Constitutionally-authorized U.S. law in 1920. Using that as a template, the United States may be back on the gold standard sometime in the 2040s or 2050s.

Utah Gold And Silver Remonetization Bill Coming To A Vote

A bill authorizing federally-issued gold and silver coins to be used as money in the state, and to allow any resident to pay Utah taxes in those metals and exempt them from state capital gains tax, has made it out of committee and is heading for a vote.

The bill cleared a state legislative committee on Wednesday, the first of 11 similar bills in statehouses across the country to do so. If the bill clears the House, it would have to pass the Senate before the governor could sign it into law.

The bill recognizes federally-issued coins because the United States Constitution forbids the several states from using their own gold and silver coins as legal tender. A bill like this would have been an impossibility as recently as five years ago, showing how much progress gold advocates have made.

Right now, the gold-standard movement is confined to the states. It might take a generation before the U.S. government seriously considers the question.