In 2019 Utah voted to allow private mints to issue their own gold backed currency. These are called Goldbacks. They have the actual stated amount of 24k gold in the form of a typical dollar bill. Very thin, of course. Then they apply a polymer coating which has the printing and artwork. The back is clear so you can see the gold.
Three other states have since made similar arrangements, Nevada, Wyoming and New Hampshire. All four states issue the Goldbacks in 1,5,10, 25 and 50 dollar face values. The mint has a published exchange rate. For instance, the 1 dollar Goldback has about $1.80 worth of gold in each one and the current exchange rate is $3.86
The mint borrowed $1 million in gold to begin with and now has sales of over $1 million a month. You can buy them on eBay, Amazon and right from authorized distributors. I just ordered some 1 and 5 dollar Goldbacks from https://alpinegold.com/purchase/ and doing it that way is much cheaper then using eBay although they have a $100 minimum order.
I normally follow the “If it’s made to be collectible it isn’t” adage but these are really cool looking and have an actual gold value.
I got a free one ($1) when they first came out. I don’t think they will replace Federal Reserve Notes (like we thought bitcoin never would either) but damn they are beautiful pieces of art.
The wikipedia said some places accept them. My question is how does one use one in a transaction? If you have a $1 Goldback, can you exchange it for $1.00/$1.80/$3.86 worth of goods or services?
I’m wondering how prevalent the use of these in transactions are or if most of those buying them up are doins so as collectors.
Interesting (to me) sidenote: this past semester, I was teaching my students about “local solutions to global issues” and one of those solutions was local currencies. I wish I’d known about the GB then!
Do they contain gold? If so, would they be considered counterfeit? Really this just seems like a fancy alternative to producing a gold commemorative coin.
Yes. Each note has a stated amount of 24k gold foil on the back. The one dollar note has 1/1000 troy ounce, about $1.80 worth today. They are not US legal tender. Within the issuing states they are called “voluntary notes” and state this on the notes. They are considered a bartering system.
So, gold is a durable and malleable metal. But I have trouble seeing how they could really stand up to the wear and tear that US currency endures. And although I like these as a work of art, it’s just a step backwards on the scale of civilization. Basing your currency on actual metallic content is heading towards the 19th century, not the 21st.
As the cited Wikipedia article states, the gold is contained between layers of polyester. Plastic has long been used in the currency of other countries because it will stand up to repeated handling.
That wasn’t my question. From the wikipedia article:
KSL 5 TV, the NBC affiliate of Salt Lake City, reported local businesses seeing a surge of people using Goldbacks in everyday transactions.[3]Reuters has reported as of 2022 that as many as “a quarter to half of small businesses in Utah will accept the [Goldback] notes”.[6]
My question is about the everyday transactions. If I’m buying groceries or whatever, does my $1.00 Goldback get me $1.00/$1.80/$3.86 worth of groceries?
I would imagine that either the prices are either marked in both Goldbacks and US dollars, or the currency conversion takes place at the register at whatever conversion rate the business wants to charge.
This, IMHO, is the interesting thing for people to realize - they are literally losing half the value as soon as they buy it - it would take a massive increase in the price of gold before they would ever ‘make money’ with them.
In other words, the only people making money off of this is the people selling them (the ‘mints’)
I thought about getting into this business, if people are paying $3.86 for $1.80 for gold, well, I will sell $1.80 of gold for a mere $3.50, and I will do it all day long.
Then I figured out that I was going about it all wrong. Bigger numbers mean a better deal. If people are willing to pay a 114% premium on gold, I can beat that by offering them gold at a 200%, nay, 300% premium. And though I could do this all day long, I’ll bump it up to 330% if you call in the next 15 minutes.