There is significant news from the gold world on Sunday, May 22nd as Utah begins a new currency era in the United States by allowing transactions between citizens and government to be done using gold and silver as the primary backing. Utah has passed and adopted a new law which allows for gold and silver to be used as currency, and is exempting taxation in the sale and transfer of gold and silver products.
Also in the news, China, after opening the new Hong Kong commodities exchange last week, is preparing a new gold based ETF to bring competition against the US based GLD fund.
The Shanghai Gold Exchange is planning to start exchange-traded funds, tapping rising demand in China, the world’s biggest investment market for the precious metal.
“There are some complexities, as the central bank is in charge of gold management, while we still need to go through the procedures for launching new exchange products,” Wang Zhe, chairman of the bourse, said at a Shanghai forum. There is no timetable and the exchange is working with regulators on the plan, Wang said. China is the world’s largest gold producer and second-largest in overall consumption. – Bloomberg
The United States and London exchanges have dominated the gold and silver markets for decades, but after recent events in the global currencies, and manipulation of metals contracts in the futures market, China has decided to create new competition that bypasses the US regulators and central banks that control the trading of precious metals.
In the meantime, the state of Utah has become the first state in the Union to accept gold and silver as legal tender since the 1930’s when President FDR confiscated gold from circulation.
Utah became the first state in the country this month to legalize gold and silver coins as currency. The law also will exempt the sale of the coins from state capital gains taxes.
Craig Franco hopes to cash in on it with his Utah Gold and Silver Depository, and he thinks others will soon follow.
The idea is simple: Store your gold and silver coins in a vault, and Franco issues a debit-like card to make purchases backed by your holdings.
He plans to open for business June 1, likely the first of its kind in the country. – Associated Press
Both local states in the US, and global nations around the world are recognizing the importance of gold as a global currency, and protection against the devaluing fiat money most of the world uses. With the state of Utah completing their legislation, and implementing a gold currency within the confines of their state, many other regions of the US are sure to follow as the dollar continues to bring massive inflation to prices and goods. At the same time, China is moving towards the day when the dollar is no longer recognized as the reserve currency, and will be out in front of most other nations when gold is once again mandated for the backing of global money in international trade. The plan to create a new gold ETF, along with the new Hong Kong commdodities exchange which opened last weekend, will shift many customers and investors to Asia from the markets of New York and London.