Imagine paying your grocery tab or tipping your waiter in actual gold. That’s a future that the company Goldback envisions with their golden money, which they describe as a “local, voluntary currency.”
“It’s been created to be used locally so that people can purchase goods and services if they want to accept gold as payment in their business,” said Goldback marketing manager Jeff Meigs. “It really gets people into the precious metals space that have never purchased gold before for around $4.”
One Goldback contains 1/1000th of an ounce of gold. It’s not U.S. tender, but businesses can choose to accept it as payment in states like Nevada where gold payment is legal.
The company says one of the currency’s goals is to protect consumer spending power.
“The U.S. Government prints more and more dollars every day, and the more they print, the less they’re worth, but gold itself, if you have gold in there, that value is separate because it’s rare,” Meigs said.
Some Northern Nevada businesses accept Goldbacks, but the owners say it’s rare that customers bring them in.
Jacob Peterson, owner of The Reno Gold Exchange, who’s accepted a handful of Goldbacks from customers, said the idea behind the business makes sense conceptually.
“From the 1940s, 30s, all the way up to today, gold has increased in value over time, and dollars seem to buy you less and less over time,” he said.
But he added that the value of the currency is in its utility. A Goldback costs much more than market-rate gold, but it’s sold in dollar amounts that the average consumer can afford.
Today, one full ounce of gold at market rate is just under $2,200. At that rate, a single Goldback is worth just under $2.20. But, to purchase it online costs $4.60.
It’s a tradeoff that Peterson regularly sees customers choose – purchasing smaller amounts of gold at a higher rate per ounce but saving money in the sense that they can’t afford a full ounce of gold.
“A lot of people can’t afford to buy $2,200 worth of gold at once, so they’ll settle for these,” he said, gesturing to 1/31 ounces of gold on his store counter that he said is going for $60-70.
He added that he doesn’t see precious metals as a reliable way for the average consumer to make money fast, but as a wealth preservation tactic. They hold their value over time.
“If you look back in the 60s, it was about a quarter for a gallon of gas,” he said. “If you look at a silver quarter just based on its silver value today, it’s $4.40, so about a gallon of gas.”
Goldback claims that’s the value in the product. With enough buy-in, a community can protect its spending power over time.
“It’s for people who want to spend precious metals. It’s for those who want to diversify. It’s for those who are the doomsday preppers that want to stack Goldbacks and put it in a vault somewhere just in case the inevitable collapse comes and the zombies come out,” Meigs said.
He added that really, the decision of whether or not to buy a Goldback boils down to one question: “Do you want to spend it in U.S. dollars, or do you want to spend it in gold?”
Visit the Nevada Goldback website here.
