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It's just empty hot air.
No one will use gold for legal tender, whether it's in coinage or not.
How are Arizona merchants going to be prepared to accept a commodity that rises and falls daily? What price will gold have? Will it be fixed or will it float?
If it floats, what will be the limits? Daily, hourly, weekly, or monthly?
Is a merchant willing to take a 13% loss on his profits if the price of gold goes up 13%? Is a customer willing to take a 13% loss on his gold investment if the market takes a 13% drop?
What state agency will be responsible for setting up the rate of exchange? Treasury? Commerce? Both could be considered equally, but the missions of each are very different.
Unless Arizona plans to mint it's own coinage, at some point, gold transactions will have to be converted into federal cash. Who will be responsible for converting a commodity into cash? Banks? Individual merchants? Commodity brokerages? State storefronts? Can a merchant opt out if he wants to? How about a big national chain store?
Will paper gold be accepted in the same way metal gold is? If not, who has the say-so?
Imagine owning an ounce of gold with no cash on hand. And wanting to take the family out for dinner and a movie, except for the baby, who is tended by a babysitter. Everybody piles in the car, and dang! Dad discovers he forgot to fill the tank this morning.
No prob. He has an $800 hunk of gold jingling in his pocket. It's 7:00 p.m., and all exchanges are closed. How many gas stations do you know of that will cash out a hunk of metal that the owner claims is worth $800 today for a $50.00 fillip?
Is the guy at the station going to take the owner's word that gold is 24 karat, or is it only 18 karat? Visually, that's hard to tell which is which. It's going to require an acid test and a very accurate set of scales. Is the owner going to trust a GED dropout that can't make simple change?
Well, since this all a fantasy anyway, let's say it gets worked out and Dad gets the fuel he needs after a deal that is a prolonged pain in the ass. The clock is ticking, but there's still time for a quick bite. Lucky for him that the gas station accepted gold. Now he has several $200.00 gold coins, some more $100.00 gold coins and a $50.00 gold coin in his pocket. And a couple of tens and some assorted quarters and nickels.
Not every merchant in Phoenix is so stupid as to accept gold. Dad can't go to McDonald's- they don't take the stuff, national policy- and he doesn't have enough cash to pay for the dinner and the movie. What to do next? It's almost 8 and the flick starts at 9!
Fill in chapter 2 and 3 of this sad tale. You get the picture. Fast forward to the end.... how much of that beautiful yellow mess does the babysitter get?
So much for dimwit conservative symbolism masquerading as state policy.
I can just see me down at the local Safeway trying to pay for my groceries with a Krugerrand
And what will I get my change in? British sovereigns, Swiss Vrenelis?
I mean, seriously, do any of our lawmakers have half a brain?
Yup. And a half-Guilder, 3 Schekels, a Goldman-Sachs certificate some crook passed, and a couple of Pence.
Like the scene in Monty Python & The Holy Grail, I think there is a big guy positioned at the main door of the Arizona Capital whose job is to punch every member of the legislature in the head as they walk in. There is no other explanation.
So much for dimwit conservative symbolism masquerading as state policy.
I would take gold as a merchant. Some people see tremendous upside to gold. And the opportunity to pick gold up without incurring a premium would be extremely enticing to physical metal investors. The problem is that I just cannot see anyone parting with gold coins or bullion. Most of the people that hold these things are all waiting for the same things.
I would take gold as a merchant. Some people see tremendous upside to gold. And the opportunity to pick gold up without incurring a premium would be extremely enticing to physical metal investors. The problem is that I just cannot see anyone parting with gold coins or bullion. Most of the people that hold these things are all waiting for the same things.
If I was a merchant, I might consider taking a gold certificate as payment, but only if the exchange was at the current rate on the commodities market, and only if the certificate was immediately convertible to currency.
I agree with you about the folks who actually hold coinage and bullion. I know an old farmer who bought a bunch of Krugerrands in 1980, and has hung onto them since, even though he could have tripled his money at one point of the current gold rush. For many years, the rands weren't worth 1/4 of what they cost him.
I asked him why he didn't sell, and he admitted he loves to pull them out and look at them. He said they make him feel rich, whether they are worth a lot of money or not. That's the power of gold. He is otherwise a very hard-headed and wise businessman.
I love AZ. My father and my aunt live there and I have spent months at a time visiting.
But when it comes to most smart political or social moves it is just behind Mississippi and Iran.
I love AZ. My father and my aunt live there and I have spent months at a time visiting.
But when it comes to most smart political or social moves it is just behind Mississippi and Iran.
Because relying on a currency that is debased and manipulated by a central bank is so forward thinking?
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