Steve Allred, the owner of a Utah company, is worried about the falling purchasing power of the US dollar, given that inflation is at its highest level in four decades.
Allred, like many other investors, has purchased gold as a hedge as they expect things would become worse. In the three hardware businesses he and his brother run, he has accepted payment in precious metals in various forms.
Allred is one of a growing number of Americans who are looking to gold as an alternative currency as government expenditures and Federal Reserve monetary easing threaten to further devalue the dollar.
According to US official data, the dollar has lost 86 percent of its purchasing value since President Nixon withdrew the fixed convertibility of dollars to gold in 1971. During this time, the price of one ounce of gold has risen from $40 to $1,900.
Many people feel that gold will keep its value better than fiat currencies like the dollar, since governments may issue debt and increase the money supply at a whim, besides its usage in jewellery and bank reserves.
According to Federal Reserve figures, the amount of US dollars in circulation has risen from $1.80 trillion in early 2020 to $2.25 trillion, an increase of more than $800 billion since 2007.
With government spending of trillions and the Federal Reserve buying enormous quantities of bonds to try to restore the economy, gold’s usage as a currency gained traction in 2007-2009. It has further intensified throughout the pandemic since 2020.
A rising number of people are using it, even though it will never challenge the supremacy of the dollar. The trend is being propelled forward by new technologies that make it possible for individuals to employ metal in even the most mundane of daily operations.
Three months ago, Allred started taking Goldbacks at his establishments. Gold flakes are embedded in the paper money, which is available in amounts ranging from one to fifty cents, or one-hundredth of an ounce of the precious metal.
It’s estimated that Allred’s customers have spent between $3,000 and $4,000. His goal is that, as the value of the dollar continues to fall, the notes will be more widely accepted and utilised for a wider range of goods and services in his community.
As the creator and president of Goldback Inc, Jeremy Gordon has stated that a quarter to a half of small companies in Utah will accept the currency. As of this writing, the Goldbacks have sold $30 million, and Cordon believes the firm might expand to roughly $1 billion in the next five or six years, but the company’s ability to create the money will limit its expansion.
Gold trading and investing software Glint Pay creator and CEO Jason Cozens have also witnessed an increasing demand for gold as a currency.
Customers may use Glint to buy gold stored in a Swiss vault and then use a Mastercard to pay for their purchases. About half of Cozens’ 105,000 clients live in the US, and registered users grew by 500% in the first quarter over the previous quarter, the company reports.
What drives everything is the fact that the money people use is shorter than a person’s lifetime and has lost much of its purchasing value, Cozens added. Inquiry into ‘Why is money depreciating?’ becomes a habit. Why can’t I do something about it?'”
Interest in gold currencies coincides with the rise of the cryptocurrency movement, which is popular in part because of a desire for decentralised systems of currency. Increasingly, individuals are concerned that the planned central bank digital currencies would give some organisations greater control over people’s finances than ever before, especially if cash becomes less popular.
As transactions are secret, precise data on how often gold is used as currency are unavailable.
Global Gold Council regional CEO Joe Cavatoni says gold is becoming increasingly popular as an investment because it performs well in times of uncertainty, but state governments are also reducing some restrictions on its usage as a currency in the US.
As of 2011, gold and silver have been recognised as legal money in Utah, Oklahoma, and Arizona. Restrictions on taxes are being eased by the states.
Works at The Truth International Magazine. My area of interest includes international relations, peace & conflict studies, qualitative & quantitative research in social sciences, and world politics. Reach@ [email protected]
