You are probably wondering what to do now that gold and silver are legal currency in Utah again. Buy a vault? Learn to prospect?
It is confusing, so I thought I'd share my knowledge gained from years of studying Uncle Scrooge McDuck comic books.
No kidding. Pay attention.
Last session, the Legislature passed a bill making gold and silver legal tender in Utah. This sounds silly, seeing as how I could always take a silver dime from my coin collection and spend it. It is a dime, after all.
What the Legislature did was make it legal to spend the value of the silver in that dime without paying capital gains taxes if I sell it. I could get $2.75 at Friday's silver price. I paid 10 cents for it, so I'm making $2.65.
Or am I? The Legislature said the silver in my dime has a constant value and my $2.75 in paper money is what's worth less. The goal is to monetize gold and silver, under the assumption that their value is stable.
Problem is, no matter what the Legislature says, silver and gold are commodities whose value changes daily relative to other commodities, such as groceries. My dime went up 22 cents between Monday and Friday, but dropped 20 percent last month.
Meanwhile, because of bad weather in Colombia, Kraft is raising its coffee prices 22 percent this summer. My dime may buy me a pound of coffee today, but only half a pound tomorrow.
Spending silver is the problem. Given gyrating commodities prices, a grocer will have a tough time figuring that day's worth of potatoes. We'll have to slice the dime or the potatoes.
Some guy in Salt Lake City says I can put my dime in his vault and spend its value with a debit card. Does he fix the value of my dime against Idaho potatoes, Colombian coffee or the world silver market?
No clue, but you can bet he won't lose money. That's why you should listen to Uncle Scrooge McDuck. He had three cubic acres of cash, mostly silver coins.
In one episode, Scrooge's money bin was hit by a tornado. His money scattered. To Huey, Dewey and Louis's surprise, Scrooge calmly said, "It will all come back."
Scrooge had money, but he also owned what economists call real wealth: thousands of factories and stores that made and sold clothes, food, shoes and other things.
People found Scrooge's money and bought stuff from him, at prices he set. Soon he had all his money back.
In "Loony Lunar Gold Rush," gold was discovered on the moon. Uncle Scrooge joined the rush but, instead of a pick and shovel, he took a grocery store. He knew the real money was made selling food to miners at grossly inflated prices.
But, I hear you say, "Scrooge loved gold because it made him rich."
Sort of. Donald found a dime. Scrooge told him to invest it and double his money in 20 years.
Donald said he'd rather have an ice cream soda.
Scrooge never bought sodas. He was a miser whose only joy was diving in his money like a porpoise, burrowing through it like a gopher and tossing it up and letting it hit him on the head.
If you think owning gold and silver is fun, go for it.
But a warning: Uncle Scrooge demonstrated many times that gold is worth only what you can get for it, and having a pile of pretty metal doesn't make you wealthy.
Not for nothing was the first Uncle Scrooge comic, ever, titled "Only a Poor Old Man."