Adjunct Law Prof Blog

Editor: Mitchell H. Rubinstein
New York Law School

A Member of the Law Professor Blogs Network

Saturday, September 3, 2011

Can you purchase items with gold coins?

The U.S. makes several coins in gold and silver which are technically legal tender. However, as the coins are worth substantially more than their face value, they are not used. Utah recently passed a law designed to change this. It permits businesses to accept these coins based upon market value, as opposed to face value.

Apparently, the law was enacted as a result of some tea party backers who advocate a return to the gold standard. In any event, good luck trying to find someone who will accept the market value of a coin. Good luck also agreeing on market value.

A New York Times article about this is available here.

Mitchell H. Rubinstein

http://lawprofessors.typepad.com/adjunctprofs/2011/09/can-you-purchase-items-with-gold-coins.html

Misc., Legal | Permalink

Comments

"good luck trying to find someone who will accept the market value of a coin" Sir, what planet do you live on? Everyone that has any ounce of sense in their head knows the spot price of gold and silver each day. ""London Fix" means the price in United States dollars per Troy ounce of fine gold andsilver, respectively, set at approximately 3:00 pm GMT each business day byagreement between London's five largest bullion banks: Bank of Nova Scotia-ScotiaMocatta, Barclays Bank, Deutsche Bank, HSBC Bank USA, and Société Générale" The original legislation that was scaled back, was created to define that price, but this was removed in favor of passing the bill. It's a brilliant law in Utah that #1 determined that U.S. gold and silver coins are currency and not a type of "property" that requires a capital gain #2 removes any tax on the purchase and sale at the state level. I'm not associated with the tea party but even I know that thousands of good people in Utah are preparing for the daily use of gold and silver as currency. Many friends are on their way to Utah today to sign up customer who with to receive a part of their monthly payroll in silver. Digital gold systems such as GoldMoney.com are also available to be used based on this new legislation. In such a case the coins are deposited in a local vault and digital units issued to be used for commerce. There's even an iPhone app! This type of system has been in wide use for over a decade. The Utah law is NOT a return to the gold standard for gov. money, it is an option for those that want to protect their saving and way of life. It's voluntary, if you want to use dollars that is your option, if you like saving with precious metals, in Utah you now have that option. Here is the original bill: http://www.scribd.com/doc/45645201/Utah-Sound-Money-Act that was scaled back to the bare bones legislation which passed. I suggest you read both bills and understand this is voluntary competing currency and the future. More than 13 states are now addressing this legislation.

From the bill, "Because sound, constitutionally based money, which over time tends to retain its purchasing power is important to the livelihood of the people of this state, to the continued solvency of the state government, as well as to the stability and growth of the Utah economy, the circulation and use of gold and silver coin within the course and scope of Utah Intrastate Commerce vitally affects the public interest."
How is this a bad thing? If you live in Utah and you think it's ridiculous, no problem, keep earning zero on your CD and I'll keep my value in metal. This is NOT a call to change the world back on a gold standard, it's a measure that provides options for those who want some help.

Mark Herpel
Editor Digital Gold Currency Magazine

Posted by: Mark Herpel | Sep 4, 2011 6:25:36 AM

Post a comment