THE UTAH GOLD BACK STATE “CURRENCY”

THE UTAH GOLD BACK STATE “CURRENCY”

February 27, 2020 By Joseph P. Farrell

Remember the Texas bullion depository? Well, Utah like some other U.S. states passed a state resolution recognizing specie as legal tender, and now there is actually a movement in the state to do just that, and a currency called the "Utah Goldback", to go with it (this article courtesy of M.L. who deserves a big thank you for sharing it):

The Utah Goldback is the first local, voluntary currency to be made of a spendable, beautiful, physical gold.

When one visits the website of this company there are a number of claims made, not the least of which is that the currency is deliberately tied to various Utah state resolutions:

The Goldback project truly began in spirit with the passage of the Utah Legal Tender Act in 2011 which recognized certain types of Gold as currency within the state. Since that time the technology to mint gold into a spendable form for small transactions has come to fruition. Goldback Inc. is using cutting edge technology to circulate gold as it never has before.

... Our goal is for people to be able to pay for anything with the Goldback whether it is a new home or a lemonade.

And there you have it: a company has been formed to provide a currency.

Curious, I poked around the website a bit more, and I began to notice some rather strange things. For example, when one visits the "Frequently Asked Questions," one runs across this:

What is a Goldback?

The Goldback is a voluntary, local currency in Utah that is made from gold. It can also stand alone as a small denomination, low price point gold product. Unlike most gold products, the Goldback is designed to be used as a currency with interchangeable denominations rather than varying premiums based on gold content. They can be used/spent nearly anywhere in the world.

Are Goldbacks legal?

Yes. It is the opinion of our Attorney that the Goldbacks are legal tender in Utah however, even without this designation the Goldback is still legal to spend and use anywhere in the United States as far as we know. There have been thousands of other local currencies in the United States and there are nearly a hundred active ones today. There are also thousands of different gold products available for sale in the U.S. The Goldback is a marriage of the two. The Goldback is valuable in large part because it is gold.

Most importantly, the creators are alive to a problem I've actually blogged about, especially in regard to the phenomenon of crypto-currencies:

...it may be difficult to spend a theoretical $1,500 gold coin or even an $80 silver coin for the purchase of toilet paper if an EMP blast wipes out the power grid for several months. It makes sense to keep a portion of this hedge in Goldbacks.

"OK," you might be thinking, "but what about counterfeiting?" This is where it gets very interesting, as the Utah Goldback site describes some - though one can safely assume, not all - of its anti-counterfeiting features:

Can the Goldback be counterfeited?

Not anytime soon. It took Valaurum over twenty years to develop the technology to create the Goldback and they have no competitors. Much of the technology is protected by trade secrets vs patents.

There are several anti-counterfeiting features on the Goldback, first, the negative image on the back can be felt. Second, no other material will glisten like gold does and no one else can do the electrolysis process with gold. Third, many of the design features on the front are government level.

Additional security features may be introduced in the future. As it stands we are about 20 years ahead of the counterfeiters.

...

In other words, there is actual gold in the gold back, created by a thin layer of electrolysis; hence, one pays more for a 50 Goldback bill than a 1 Goldback bill, because the layers of electrolysis have to be thicker in the case of the larger denomination note.

What I find incredibly intriguing here, however, is the suggestion implied by the website's comment: the technology for making the goldbacks has been in development for over two decades. The Utah state resolution regarding specie, and the appearance of the Goldback, was perhaps therefore somewhat less than coincidental. This is, after all, Utah.

But it was when I clicked on the tab "Guide to Getting Goldbacks" that I saw what can only be considered ... well... a "whopper doozie".

Before we get to that "whopper doozie," however, I need to tell you that today I'm not even going to indulge in my usual daily dose of high octane speculation. Rather, I'm going to use the lawyer's trick of asking a question, or making a comment, that is "against the rules," to which the opposition attorney would normally say "objection!" and to which the bench, without having to hear the nature of the challenge, would simply reply "Sustained," occasionally adding the (useless) instruction to the jury "the jury will ignore that last question/remark of counsel." Indeed, the whole purpose of such questions or remarks, as we all know, is one of the oldest tricks in any trial attorney's playbook, designed to plant a thought or idea in the jury's minds, which the bench promptly reinforces by telling the jury to ignore it; it's the legal version of the old gag "don't think of a pink elephant for the next five seconds."

In this case, of course, there is no crime nor trial. But there are plenty of implications, and probably quite a few I've not considered and that the reader will immediately think of. So lest I "dye the waters" and limit speculation, this time I'm keeping my thoughts to myself (at least for the moment.)

With that caveat on record, now on to the "whopper doozie." One might naturally be asking, "OK, suppose I get some Utah Goldbacks. Where can I spend them?" The answer is found on the tab "Guide to Getting Goldbacks." The answer begins somewhat blandly:

The number of coin stores that carry the Goldback is gradually growing.

OK, that's good I thought.  And the site provides a list:

  1. The United Precious Metals Association in Alpine, UT

  2. RareKoin.com in Lehi, UT.

  3. APMEX.com

  4. Rust Rare Coin and Gift in Provo, UT.

  5. Rhodes Gold in Vernal, Ut.

  6. Infinity Coins in Idaho Falls, ID.

  7. Gold and Silver Coins in Ontario, OR.

  8. Ebay.

  9. Excelsior Coin & Collectibles, Excelsior, MN.

  10. Ho Mong Kok Shopping Center, Hong Kong

  11. All Good Coin, St. George UT (Pending) (All emphases added)

Now, I expected to find things like Ebay and coin stores.

But a shopping center in Hong Kong!? And just look at what the Ho Mong Kok Shopping Center specializes in:

Ho Mong Kok Shopping Center

Now, I already told you I wasn't going to say anything about this whopper doozie, nor say anything about my high octane speculations that are running wild and loose all over the place, returning wholesale dividends of speculation for a minimum investment of fact, but rather keep them to myself, and thus I am not going to say anything about how this is an ingenious way to spread Utah Goldbacks by using a major Asian financial and trading and numismatic center, and how convenient the same technology would be if silver could perhaps also be used, since silver kills nasty bugs like ... oh, I dunno, viruses and such .... And I promised that I wasn't go to say anything about my suspicion that this could somehow be a response to  China's bi-lateral currency swap deals and gold buying spree and that it strikes me as a bit odd, too, that the Hong Kong dollar is usually pegged to the US dollar, and how this type of thing might be a way to "unpeg" it...

...and a lot of other stuff like that. So I'm not going to talk about it at all, but rather, let your own minds work it all out.

See you on the flip side...