Thread: Gold, silver coins to be legal currency in Utah

Gold, silver coins to be legal currency in Utah

By JOSH LOFTIN, Associated Press

Sunday, May 22, 2011 at 12:23 p.m.

SALT LAKE CITY — 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."

Earlier this month, Minnesota took a step closer to joining Utah in making gold and silver legal tender. A Republican lawmaker there introduced a bill that sets up a special committee to explore the option. North Carolina, Idaho and at least nine other states also have similar bills drafted.

At the moment, Franco's idea would generally be the only practical use of the law in Utah, given the legislation doesn't require merchants to accept the coins, either at face value - $50 for a 1-ounce gold coin - or market value, currently almost $1,500 per ounce. And no one expects people will be walking around town with pockets full of gold and silver.

Matt Zeman, market strategist for Kingsview Financial in Chicago, expects more people will start investing in gold as America's growing debt and bankruptcies in other countries continue to decrease the value of government-backed money.

"You've seen gold replacing these currencies as safety instruments," Zeman said. "If I don't feel good about the dollar or other currencies, I'm putting my money in precious metals."

Some supporters, including the law's sponsor, seek to push Congress toward removing the tax burdens that discourage use of the coins, such as a federal capital gains tax.

"Making gold and silver coins legal tender sends a strong signal to Congress and the Federal Reserve that their monetary policy is failing," said Ralph Danker, project director for economics at the Washington, D.C.-based American Principles in Action, which helped shape Utah's law. "The dollar should be backed by gold and silver, so we have hard money."

The U.S. and many other countries largely abandoned gold-backed money during World War II because they needed to print more cash to pay for the war. Later, during the Great Depression, President Franklin D. Roosevelt took steps that essentially prohibited gold and silver as legal currency to prevent hoarding.

In 1971, President Nixon formally abandoned the gold standard.

Fifteen years later, the U.S. Mint began producing the gold and silver American Eagle coins, primarily aimed at investment portfolios and allowing people to trade them at market value but with capital gains taxes on profits.

Utah is now allowing the coins to be used as legal tender while levying no taxes.

Opponents of the law warn such a policy shift nationwide could increase the prospect of inflation and could destabilize international markets by removing the government's flexibility to quickly adjust currency prices.

"We'd be going backward in financial development," said Carlos Sanchez, director of Commodities Management for The CPM Group in New York. "What backs currency is confidence in a government's ability to pay debt, its government system and its economy."

Larry Hilton, a Utah attorney who helped draft the law, disagrees and says the gold standard would restore faith in American money at a time when spiraling debt is weakening confidence.

"We view this as a dollar-friendly measure," Hilton said. "It will strengthen the dollar by refocusing policy matters in Washington on what led to the phrase, `the dollar is as good as gold.'"

http://www.signonsandiego.com/news/2011 ... y-in-utah/

States Look at Bringing Back Gold, Silver Coins

CBNNews.com
Wednesday, May 18, 2011

South Carolina is the latest state to propose a bill that would allow gold and silver coins to be used as legal tender.

On Wednesday, American Principles in Action, a conservative non-profit group, announced that the bill has the official support of the South Carolina Republican Party.

"The South Carolina legal tender bill follows the passage of a new law in Utah, which on May 9th became the first state in more than a century to recognize gold and silver coins as legal tender," the group said.

"Article I, Section 10 of the U.S. Constitution specifies that the states shall not 'make anything but gold and silver coin a payment in tender of debts,'" they continued. "With the federal government clearly abdicating its responsibility to regulate the value of money, states across the country are moving to exercise this constitutional power."

More than a dozen other states are considering similar moves.

The state of Utah started the trend earlier this month when it recognized gold and silver coins minted by the U.S. government as money.

Rising inflation and the nation's weak economy is leading to the new focus on gold. Tea Party leaders and conservative economists say using gold would help restrain government spending and keep the Central Bank's power in check.

http://www.cbn.com/cbnnews/finance/2011 ... er-Coins-/

New Minn. Bill Puts Premium on Gold, Silver

Posted at: 05/06/2011 1:51 PM

ST. PAUL, Minn. (AP) - Have a stash of gold and silver coins? A Minnesota lawmaker wants to recognize them as legal tender in the state.

First-term Rep. Kurt Bills introduced legislation Thursday to give the precious metals official standing in the state. The Republican's bill also sets up a special committee to determine whether Minnesota should adopt an alternative currency.

Both ideas have popped up in states from North Carolina to Idaho as a nod to sovereignty and a protest to Federal Reserve monetary policy.

Even if the gold-and-silver bill became law, standard currency would still be permitted in Minnesota transactions.

The bill hasn't been scheduled for a hearing as the session winds toward adjournment so it is unlikely to move ahead this year.

http://www.wdio.com/article/stories/S21 ... ?cat=10359

United States Mint Launches Ulysses S. Grant Presidential $1 Coin

ST. LOUIS, May 19, 2011 /PRNewswire-USNewswire/ --

The United States Mint and the National Park Service hosted a launch ceremony to celebrate the release of the new Ulysses S. Grant Presidential $1 Coin today, the 148th anniversary of Grant's Civil War Vicksburg campaign in Mississippi.

"Beginning today, Federal Reserve Banks are releasing millions of Ulysses S. Grant Presidential $1 Coins into circulation to be used by Americans everywhere in the nation," United States Mint Acting Deputy Director Al Runnels said in his remarks. "Americans know Grant best as the victorious general in the Civil War, and these new coins can't help but remind us of that defining period in our history, but they will also connect America to Grant's two terms as our 18th President."

John Marszalek, executive director of the Ulysses S. Grant Association, joined Runnels at the coin launch, which was held at the Ulysses S. Grant National Historic Site in St. Louis. The site is where Grant and his wife Julia occasionally resided during the 1850s. Members of the public who attended the event were among the first in the Nation to get the new $1 coin. Following the ceremony, each attendee 18 years old and younger received a Ulysses S. Grant Presidential $1 Coin to commemorate the event, while adults exchanged their currency for 25-coin rolls of the new coin.

The Ulysses S. Grant Presidential $1 Coin is the 18th release in the United States Mint Presidential $1 Coin Program, authorized by Public Law 109-145, the Presidential $1 Coin Act of 2005. The coin's obverse (heads side) features a portrait of former President Grant by United States Mint Sculptor-Engraver Don Everhart and the inscriptions ULYSSES S. GRANT, IN GOD WE TRUST, 18th PRESIDENT and 1869-1877. The coin's reverse (tails side), also by Everhart, features a dramatic rendition of the Statue of Liberty. Inscriptions on the reverse are $1 and UNITED STATES OF AMERICA, with E PLURIBUS UNUM, 2011 and the mint mark (P or D) incused on the edge.

Ulysses S. Grant was born in Ohio in 1822. He attended the U.S. Military Academy at West Point and fought in the Mexican War under General Zachary Taylor. At the outbreak of the Civil War, Grant was appointed to command an unruly volunteer regiment. After he won battles at Vicksburg, Miss., and Chattanooga, Tenn., Lincoln appointed him general-in-chief in March 1864. Grant, a symbol of Union victory during the Civil War, was the Republican Party's logical candidate for President in 1868. During his administration, Yellowstone was established as the first national park, and Congress passed a bill calling for equal pay for women and men holding similar jobs in federal government agencies. After retiring from the presidency, Grant learned that he had cancer of the throat. At the suggestion of author Mark Twain, he wrote his memoirs. Soon after completing the last page, he died on July 23, 1885.

The United States Mint, created by Congress in 1792, is the Nation's sole manufacturer of legal tender coinage and is responsible for producing circulating coinage for the Nation to conduct its trade and commerce. The United States Mint also produces proof, uncirculated and commemorative coins; Congressional Gold Medals; and silver, gold and platinum bullion coins.

http://www.prnewswire.com/news-releases ... 53983.html

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Only U.S. coins must be accepted.

The state of Utah started the trend earlier this month when it recognized gold and silver coins minted by the U.S. government as money.

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This article was originally printed in Numismatic News.

The spot price of silver increased dramatically in late spring. Many coin dealers acknowledge they are doing more business in buying and selling silver (and gold) composition coins for bullion values than they are with collector and “rareâ€

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