Goldbacks as currency

[Alexx1401]

Here's a video of someone who did exactly that.

GOLDBACKS ... Can YOU Recover Gold From Them?

He's definitely on the Novelty Only side of the fence!

Looks like it makes a hell of a mess. What was left over I would have to guess would bring less than any gold coin to as someone would have to smelt out the crap left over.

 

[Bacchus]

If you want to use gold as money deliver a coin in small denominations $5, $10, $20, etc... DR

The current American Gold Eagle (AGE) bullion coin at nominal $5 denomination is 1/10 oz = $236.87 of gold at today's spot price.

The 1/10 oz AGE is 16.5mm diameter. A dime is 17.9mm.

A coin with $5 worth of gold would be very small, considering the coin with $236.87 of gold is smaller than a dime.

Without intending to, you've just reiterated one of the arguments FOR the Goldbacks: smaller denominations of gold.

 

[Bacchus]

Looks like it makes a hell of a mess. What was left over I would have to guess would bring less than any gold coin to as someone would have to smelt out the crap left over.

OR you could get one of these:

TOAUTO gold melting furnace

and melt your own gold. I saw a YouTube video where a pawn store owner buys old jewelry, both from in store purchases and from garage sale acquisitions, and then melts it down into a nugget using this device.

 

[Bacchus]

I spend way too much time watching YouTube!

 

[Bacchus]

A coin with $5 worth of gold would be very small, considering the coin with $236.87 of gold is smaller than a dime.

Hmmm. I've rethought that. I guess there is no reason the smaller denomination coins would have to be 22K gold like the existing American bullion. You could make the $5, $10, $20 coins the same size as the 1/10 oz coins (dime-sized), and then just adjust the percentage of gold in them.

Well, maybe there's a reason. You would have coins with 2%, 4%, and 8% gold instead of the 91.67% gold of the AGEs.

Of course, that wouldn't be any worse than 1 Greenback with 1/1000 oz of gold in it.

 

[MTpockets]

Beats carrying around....

....a crate of GOLDSCHALGER.

 

[Alexx1401]

Hmmm. I've rethought that. I guess there is no reason the smaller denomination coins would have to be 22K gold like the existing American bullion. You could make the $5, $10, $20 coins the same size as the 1/10 oz coins (dime-sized), and then just adjust the percentage of gold in them.

Well, maybe there's a reason. You would have coins with 2%, 4%, and 8% gold instead of the 91.67% gold of the AGEs.

Of course, that wouldn't be any worse than 1 Greenback with 1/1000 oz of gold in it.

If they wanted to make coins that would actually be worth something silver would seem far easier.

 

[Nosferatu]

Here's a video of someone who did exactly that.

GOLDBACKS ... Can YOU Recover Gold From Them?

He's definitely on the Novelty Only side of the fence!

That video needed more disclaimers. I can't decide if I should try it at home or not.

 

[CamoDeafie]

If they wanted to make coins that would actually be worth something silver would seem far easier.

Ya mean like the 71 billion ($71 billion face value) Sacagawea "gold" dollars thats copper cored clad with manganese brass and having 0% precious metals content?

 

[Bacchus]

If they wanted to make coins that would actually be worth something silver would seem far easier.

"Junk silver" is still available.

 

[gmerkt]

If you want to use gold as money deliver a coin in small denominations $5, $10, $20, etc...

Goldbacks and gold coins have one thing in common, that is, the smaller the denomination, the higher the premium. The smaller the pieces the nut has to be cracked into, the guys who do it want their share. In the case of US gold bullion coins, it's the US Treasury. The premium on a 1/10th of an oz. coin is terrible compared to a one oz. coin. I've bought some, but only as emergency pieces. That's were silver might come in more handily for fractions of a full oz. Although the ratio between silver and gold has gone beyond all reason in contemporary times, back when the US Gov't set the prices, a nominal one oz. gold coin was equivalent to a nominal 20 oz. of silver. 20 silver dollars, 40 silver half dollars, et al. Yes, there were US gold coins in denominations of less than $20, and there was no premium on them. That was a later evolution of capitalism.

Little known fact, paper currency issued by the US Gov't came about in 1861 as a way to create money to pay for the Civil War. Gold was still the standard. Prices or means of payment were stated for each. Meaning, there was a serious discount afforded to paper which fluctuated a lot during the war. These paper notes were not backed by gold or silver. That didn't occur until the 1870's when gold and Greenbacks reached a status of par.

There had been a previous attempt to circulate a US currency in 1775-6, but it quickly became worthless because of lack of backing and excessive issuance.

 

[Bacchus]

Here's a good YT video on GB:
Does the Goldback Actually Solve Any Problems?

The standard "exchange rate" is posted here
GB exchange rate

and today it is at $4.81, which means that where these are used as a currency the existing purchasing power for goods or services is $4.81. This is not the price you would pay from a dealer to purchase them in the first place. Most of them charge a premium over the exchange rate, and much over the gold value, although the two dealers I referenced at the bottom appear to be selling theirs at less than the exchange rate. If that is true, you could buy a Goldback for $4.55 and use it to purchase $4.81 worth of goods. None of these figures includes the shipping charges if you are buying these new from a dealer. I see that now there are Goldbacks ATM machines in Nevada.

Somebody is going to complain that a 1 Goldback note only contains about $2.40 in gold, but how much gold does your five dollar bill contain, with about the same purchasing power? Think of it as a currency, not as an investment.

A useful calculator for when you are buying or selling with Goldbacks is here
Goldback calculator

This simple but well thought out calculator allows you to enter a purchase amount, the exchange rate, Goldbacks that can be paid without exceeding the purchase amount, the actual number of Goldbacks paid by a customer, and how much additional the customer owe in dollars or has coming back in change.

I've been looking at prices from the various dealers that sell them, mostly some of the bigger bullion dealers. The best prices I've found, by a surprisingly large amount, are from

Alpine Gold. Today's price: $4.55

And

DefyTheGrid. Today's price: $4.56

 

[lucusloc]

The biggest problem with this scheme is that there simply is not enough gold in existence to cover the needs of an entire economy. Gold is simply too scarce, and the math does not get better if you add in all the other precious metals especially when you see those metal's utility in industry increasing. If this plan takes off you can expect to see the value of gold skyrocket due to scarcity vs. demand. Gold is already expensive enough that it is difficult to use it in industry even where it would be ideal. Using it as a primary currency would prevent it's general use for its metallic properties almost entirely (and ditto for platinum and silver too).

(of course these limitations are exactly why this will never take off in the first place. As soon as there was enough demand for gold bills they would be priced out of reach of the common man and the plan would collapse. No matter how much attention they get that price feedback loop will keep them a curiosity with no hope of gaining widespread circulation).