What started out as a protest against the big, bad Federal Reserve has turned into a way to turn silver and gold into a banking bureaucracy.
This month, Utah legalized precious metals gold and silver as currency. And one Utah business owner -- and likely others will follow -- plan to offer "banks," or vaults for persons to store their gold or silver. So far, it all sounds sort of Harry Potter-ish cool in a way, except for one downer -- the required use of debit cards.
You see, Utah merchants aren't required to accept precious metals. So, buyers will be issued debit cards backed by the amount of gold and silver in a vault, and its fluctuating market price.
Our question to all those banking critics who wanted to send a stern message to the Federal Reserve is, How is the "silverngold" debit card any different from what we have now in our local banks, courtesy of rules provided by the feds? The holder of the debit card account will still have to keep track of his "gold bank account" -- or make sure that the precious metals vault company does -- and pay the required capital gains tax on the metals' increase in value.
These silver and gold "banks," despite all the anti-fed rhetoric that greets their arrival, still seem as bureaucratic as a conventional bank, and very likely more than a conventional financial institution.
So, while we greet the arrival of gold and silver debit cards, we remind users that they have as much chance of enjoying easier, government-free financial transactions as they have in buying a Firebolt racing broom with gold in Diagon Alley.