Utah becomes 1st in nation to approve gold and silver payments for state vendors (1 Viewer)

[Doug64]

An interesting move on Utah's part, though I have doubts about how extensively this will get used.

Utah becomes 1st in nation to approve gold and silver payments for state vendors

The Utah Legislature passed the precious metals amendments bill authorizing the state treasurer to issue a competitive procurement for a precious metals-backed electronic payment platform, allowing state vendors to opt

www.stgeorgeutah.com

The Utah Legislature passed the precious metals amendments bill authorizing the state treasurer to issue a competitive procurement for a precious metals-backed electronic payment platform, allowing state vendors to opt for payment in physical gold and silver.

Sponsored by Rep. Ken Ivory and carried in the Senate by Sen. Keith Grover, the bill, designated HB 306 in Utah's 2025 legislative session, passed with strong bipartisan support in both the House and Senate and now awaits the governor’s signature. This landmark move positions Utah as the first state in the nation to pass a transactional gold bill, according to a news release issued by the Utah Office of State Treasurer.

And the section of the Constitution that allows this, Article I, Section 10: "No state shall ... make anything but gold and silver coin a tender in payment of debts ..."

 

[lwf]

I wonder if that's a commentary on the outlook of the economy in the coming years?

https://www.forbes.com/sites/garthf...ice-hits-record-3000-whats-driving-the-rally/

 

[Grand Mal]

I wonder if that's a commentary on the outlook of the economy in the coming years?

https://www.forbes.com/sites/garthf...ice-hits-record-3000-whats-driving-the-rally/

When states begin accepting something other than the national currency for payment, yeah, you gotta wonder.

 

[BirdinHand]

Doesn’t exactly scream “we have confidence in the strength of US currency”, does it?

 

[Michael Cole]

What purpose does this law serve?

Technological advancements now enable fractional gold transactions. A precious metals-backed electronic payment platform could facilitate real-time transactions, seamless dollar-to-gold conversions, and secure gold storage in Utah under strict safety standards.

Yes, this is how the gold market operates. Dollar-to-gold conversions are happening right now.

I read through the article, and I fail to see what this law is supposed to do. Where is the physical gold that backs these electronic transfers? What economic purpose does it serve allowing state vendors to trade in gold? Since the gold-to-dollar conversion needs to be calculated each transaction, is this not an unnecessary burden when we already have dollars that need no conversion?

Doesn't make a whole lot of sense.

 

[Doug64]

Doesn’t exactly scream “we have confidence in the strength of US currency”, does it?

No. No, it does not.

Where is the physical gold that backs these electronic transfers?

The gold would be held by the state in secure vaults. From the bill:

(b)"Precious metals-backed electronic payment system" means an electronic payment
system that:

(i)uses physical gold or silver held in vault facilities within the state as backing for
electronic transactions;

 

[Michael Cole]

No. No, it does not.


The gold would be held by the state in secure vaults. From the bill:

Yes, I read that part. Gold is now in private hands, so I'm still not seeing how the state holding gold is any different than held privately. What difference does it make whether my gold is in a secure box at the bank or in a vault in Salt Lake?

 

[Doug64]

Yes, I read that part. Gold is now in private hands, so I'm still not seeing how the state holding gold is any different than held privately. What difference does it make whether my gold is in a secure box at the bank or in a vault in Salt Lake?

It isn't just the state holding the gold, it's the state holding the gold combined with a platform allowing the gold to change ownership--and so be used as a medium of exchange--without ever leaving the vault. All that would change is the record of who owns it.

 

[Michael Cole]

It isn't just the state holding the gold, it's the state holding the gold combined with a platform allowing the gold to change ownership--and so be used as a medium of exchange--without ever leaving the vault. All that would change is the record of who owns it.

So what would be the advantage economically? How does this law make sense? Why would someone choose to trade in gold rather than dollars?

 

[Doug64]

So what would be the advantage economically? How does this law make sense? Why would someone choose to trade in gold rather than dollars?

Gold is a lot more inflation-resistant than dollars.

 

[Michael Cole]

Gold is a lot more inflation-resistant than dollars.

Yes, which is why people hold it. Doesn't explain the purpose in using it as currency.

 

[Doug64]

Yes, which is why people hold it. Doesn't explain the purpose in using it as currency.

Because that inflation resistance extends to services and products purchased with it.

 

[Jason Warfield]

Because that inflation resistance extends to services and products purchased with it.

Yes, it can be inflation resistant over the years, but...part of the reason for that is because it usually isn't directly correlated to inflation. Plus, gold has its own market, which tends to be volatile...values go up and down fairly easily. It's really bad in terms of investments and most prefer stocks and real estates when investing. Which means...the gold market, when it decreases can take a few years to return to the previous market value.

Basically, has the same problems as the dollar. Where the resistance to inflation comes in is if you acquire gold as long term investment and not as method of payment. But we are talking investment here, so economic conditions determine when you sell your gold investments for the highest value. Not when you need it to pay bills or buy things on a day-to-day basis. Iffy at best.

 

[Doug64]

@Jason Warfield, you're confusing gold as a currency with gold as an investment, they don't work the same way. With gold as an investment, the value fluctuates with people's faith in the economies underpinned by the fiat currencies we've adopted. With gold, while prices might rise or fall based on supply and desirability of the product or service, those prices aren't usually driven by changes in the amount of currency floating around.

 

[Operative13]

The US ditched the gold standard decades ago. Utah would have to exchange that gold and silver out for dollars to make any use of it. It's equivalent to accepting the Yen or Yuan as payment.

The only benefit this would have is allowing those with sizeable gold reserves to offload it to a third party that will inherit the volatility of gold's worth against the dollar. In this case, Utah's own government. And the poor are definitely not ones to casually carry gold with them.

 

[WillyPete]

I obviously don't know, but my read is that this is part of a religious narrative they are telling themselves.

Mormons are preppers, the apocalypse can't start soon enough for them.

 

[VanceMack]

Utah has the number one ranked economy in the country, 3rd overall combined ranking including employment and growth, and maintains a budget surplus...no state debt. I reckon whatever they are doing works and hedging your state capacity with a gold investment buffer makes sense.

 

[Doug64]

The US ditched the gold standard decades ago. Utah would have to exchange that gold and silver out for dollars to make any use of it. It's equivalent to accepting the Yen or Yuan as payment.

The only benefit this would have is allowing those with sizeable gold reserves to offload it to a third party that will inherit the volatility of gold's worth against the dollar. In this case, Utah's own government. And the poor are definitely not ones to casually carry gold with them.

You're treating this as if this would be tied into the dollar economy. I don't know the details, obviously (since the details don't exist yet), but the only way I see it working is if it is a separate economy from the dollar economy. Whatever fluctuations might happen with the dollar wouldn't impact any contracts using the gold exchange.

 

[Operative13]

You're treating this as if this would be tied into the dollar economy. I don't know the details, obviously (since the details don't exist yet), but the only way I see it working is if it is a separate economy from the dollar economy. Whatever fluctuations might happen with the dollar wouldn't impact any contracts using the gold exchange.

First in the Nation: Utah Legislature passes bill paving the way for state vendors to be paid in gold and silver | Utah Office of State Treasurer

treasurer.utah.gov

"A precious metals-backed electronic payment platform could facilitate real-time transactions, seamless dollar-to-gold conversions, and secure gold storage in Utah under strict safety standards."

In a way, it still is. Just trading in gold/silver would effectively make Utah's economy isolated to itself, as no other state recognizes those metals as legal tender. They might justify it as a way to be completely separate from the increasingly inflationary Dollar, but in practice, it's difficult to see how this would aid your average Utahn. You have to have gold/silver to begin with to make use of these new laws, and typically the only entities to have ample amounts of it are big business and the wealthy. Sure, the fractional shares of the metals could encourage others to buy in, but again you're limiting your spending power to just within Utah state unless you re-exchange to dollars.

 

[Chomsky]

I'm at a loss to understand what the problem is that they're trying to resolve?

 

[Lord Tammerlain]

Gold is a lot more inflation-resistant than dollars.

It fluctuates in value far more than the dollar, in a span of a year or twopeople can lose 40% or gain 40% of their US wealth if it was just in gold

 

[Carjosse]

Why is every part of US society seemingly trying to regress back to the 1800s as fast as possible?

 

[Operative13]

I'm at a loss to understand what the problem is that they're trying to resolve?

By encouraging people to transact with gold/silver instead of dollars, they are creating an internal economy just for themselves. Essentially, they want Utahns to only work in Utah, as there is no way to transact gold/silver elsewhere in the US.

Utah First.

 

[Chomsky]

By encouraging people to transact with gold/silver instead of dollars, they are creating an internal economy just for themselves. Essentially, they want Utahns to only work in Utah, as there is no way to transact gold/silver elsewhere in the US.

Utah First.

Interesting. Could be, as I can't think of any other theory.