A new way of collecting and spending gold is taking off in the West. A Utah-based company called Goldback is manufacturing bills that contain small amounts of gold, and customers can use the bills in four states, including Wyoming.
Amid skyrocketing inflation, demand is up for alternative currencies like goldbacks, which make it easier to spend precious metals. Will Walkey covered the story for the Mountain West News Bureau and Marketplace. He chatted with KHOL via Zoom about what he found.
The following interview transcript has been edited for clarity and brevity. This conversation was recorded on Nov. 29.
Hanna Merzbach/KHOL: Can you tell us the basics about this new currency?
Will Walkey: It’s a new take on a very old strategy. People have been wanting to own precious metals since precious metals were first discovered, not only to use in things like jewelry, but also just as a hedge against inflation — the idea being that precious metals have some sort of value as opposed to the United States dollar, which isn’t backed by anything other than the U.S. government. So, what this new currency does is it allows you to spend gold, one of the most valuable precious metals, in a way that you couldn’t before. What this bill does is it flattens gold out using some pretty revolutionary new technology, I would say, into a bill that’s sort of the size of a dollar bill. You can buy and sell them often at gold, silver and pawn shops, but a lot of businesses, especially in Utah, where this first started, including candy stores and chiropractors, say they accept them.
KHOL: I know they’re only accepted in select places. In Wyoming, the closest place to Jackson is Concho’s Mountain Man Crafts in Bondurant. I’m curious, how did you initially catch on to this story?
Walkey: I first caught onto it by just reading an article about it in the Cowboy State Daily, essentially saying this new Wyoming edition of goldbacks was being released. They’re these beautiful bills. They’re golden with horses and cowgirls etched onto it. And so I decided to check it out myself and see what the hype was about. I drove over to Cheyenne and went to a pawnshop that’s the main goldbacks dealer in Cheyenne. And the owner talked to me a lot about how much excitement there is around this. The more he tells people, the more people are coming in and wanting to buy these goldbacks, either to try and spend them somewhere or as a sort of store of wealth.
KHOL: I know these bills and other forms of gold and silver are seeing heightened interest with inflation. How did experts explain this trend to you?
Walkey: It’s hard to say how different right now is in terms of people wanting to get forms of gold and silver compared to years past. Like I said, this is something that people have wanted to do a long time, but I think it is fair to say that since the pandemic and since inflation really started to skyrocket as a result of the pandemic, there are more and more people that are interested in alternative currencies, whether that’s Bitcoin or digital currencies or precious metals, stuff that you can hold in your hand. The people that I talked to at Goldback said that they are essentially printing as much as they can and selling out every single month, and the same is happening on the ground in Cheyenne at the pawnshop that I went to. But, when it comes to if this actually is a good idea to hedge against inflation, experts are pretty mixed on that and pretty skeptical in general that precious metals like gold and silver are a good hedge against inflation, since they are still affected by macroeconomic variables.
One thing I will say, though, is that I bought a Goldback bill. It had about $20 worth of gold in it, and I bought it for $20. And I’m seeing it on eBay right now, and it’s being sold for about $26. So, there actually is some value in collecting goldbacks because they’re new and unique and very beautiful as a currency.
KHOL: Your story for Marketplace asked, “Are they a good idea for customers?” Where did you land on that question after all this reporting?
Walkey: Really mixed. On the one hand, it’s a really interesting collectible. On the other hand, the idea that it’s a really good idea to do what’s called stacking — which is buy a ton of goldbacks and use it as a store of wealth in case the government goes down and we all need to start using an alternative currency other than the U.S. dollar — that’s probably not the best idea for a couple of reasons. Gold is affected by inflation just like any other store of value. And also to get a Goldback bill, you do have to pay a hefty premium. So, if you were to want to create a store of wealth in gold, you might be better off just going to a pawn shop and getting a gold coin, because if you don’t want to spend it, then why are you paying a premium for it?
Now the question is, do you want to have it as a collectible or spend it in a store? There are stores, especially in Utah. In Wyoming, there are a couple of interesting ones, some jewelry stores here in Laramie. You could go to a gas station and say, “I have this.” You could legally try and barter for that. The question is, is that something that people will actually accept or will they just look at you weird like you’re wasting their time? I think for now, it’s probably more likely to be the latter. But, as goldbacks become more common knowledge and as more people get their hands on them, I think it’s fair to say that they could be something that more and more people are interested in, and as more people become interested in it, well, then that gives it some more legitimacy.