You have seen fractional gold down to 1/10 of an oz, but have you seen 1/100 of an oz gold foil note?
These are gold backs. They are shaped like the U.S. dollar, but instead of a paper-cotton mixture, they contain gold between layers of polymer. Gold backs are a local, voluntary, non-dollar currency. A voluntary local currency is a currency for local use with an agreed-upon value by businesses and individuals involved in a transaction.
They are used as currency in several states, including Wyoming, Utah, Nevada, and New Hampshire, and encourage spending with local businesses to keep funds within a community.
Each goldback has a denomination of one, five, ten, 25, or 50 Goldbacks and a corresponding weight of .999 fine gold embedded in the polymer. They offer a compelling answer to some concerns inherent in fiat currency and preventative solutions if a Central Bank Digital Currency (CBDC) is introduced in the United States.
Are Goldbacks Real Gold?
Goldbacks contain .999 fine gold. The production process begins with a design and a 500-foot roll of polymer sheeting. Using proprietary deposition technology, 24-karat gold is deposited on the polymer sheet with precision, atom by atom.
After deposition, the gold layer is sealed with a second polymer layer to keep the gold safe. The negative image formed on the back of the gold back doubles as a security feature that is nearly impossible to replicate.
Are Goldbacks Legal Tender?
On a federal level, goldbacks are not recognized as legal tender. Their gold content automatically ties its value to the gold spot price instead of the Federal Reserve.
While spending them may involve some math to determine the value of 1/1000th oz of gold today, and how much change is due, it also means they can appreciate.
Gold as Money vs. The Dollar
At the heart of many of these questions is another underlying query: Will the U.S. dollar lose its global dominance? In 2023, we have seen more steps taken towards a BRICs dollar while nearly half of the United States have made steps to accept gold and silver as legal currency.
While we want the U.S. dollar to be strong, it pays to be vigilant, and it pays to diversify with investment vehicles like gold and silver. Goldbacks are an ideal way to purchase incremental amounts of fractional gold that can be spent much more easily than trying to cut an American gold eagle into smaller pieces.
They fill the smaller denominational holes below the 1/10 oz gold American eagle. The one goldback contains 1/1000th of a troy oz of gold, and the fifty goldback is 1/20th of an oz, exactly half of the smallest American gold eagle.
Altogether, that creates a workable and functional gold currency system.
Should you use gold backs to pay for groceries? Call ahead and ask if the business you intend to visit accepts them first. While they are legal tender and recognized in hundreds of stores, shops, and service centers, they are voluntary, so a clerk does not have to accept them.
