Yes, you heard correctly. If you happen to be short of cash at the supermarket, you can use gold instead to pay for it (assuming you have any). Well, if you live in Colorado.
The state senators of Colorado are in the midst of passing a bill that would potentially legalize gold and silver so the precious metals can be used as currency. Gold and silver are currently considered property, so any profits generated from them are taxed as capital gains. 12 other states have already considered this, notably Utah, Georgia, Montana, Missouri, Indiana, Iowa, New Hampshire, Oklahoma, South Carolina, Tennessee, Vermont, and Washington. In fact, Utah is one state that has made significant progress. In March of last year, the state House passed a bill legalizing gold and silver as currency. This also means that capital gains are exempt. The next step would be the state Senate.
With the country’s current trade deficit of $85.5 trillion (and which it is growing every second), many are hoping that using gold as an alternative currency can strengthen the dollar. It may seem counterintuitive because gold is often purchased as a safety precaution, especially during times of turmoil. However, the daily price fluctuation of gold can actually work in merchants’ favor. Gold closed at $1,775 on Friday, up from approximately $1400 from a year ago, and then reached a high of $1850 last August.
While currently merchants in states that have legalized gold and silver are not required to accept them (i.e. Utah), they may be able to rake in more sales if they widen the range of currency that they accept. The biggest issue at hand, however, is counterfeit gold and silver. Just like merchants have to worry about fake bills, now they’ll have another thing to worry about. Considering the volatile state of the economy with many people owning gold (especially among the wealthy who have stacks stored in their bank accounts), I feel that it is still a legitimate risk that merchants should take if they want to stay alive.