A New Kind of Gold Standard?

In the latest issue of the magazine, I have a piece examining a strange and growing trend in some conservative circles—pushing states to adopt alternative currencies to the federal dollar. The basic concern is one you've probably heard from Ron Paul: The Federal Reserve can't be trusted, the national debt is out of control, so the U.S. dollar, backed only by faith in the government, may become worthless. (The story outlines some of the more obvious economic problems with this theory.)

To deal with the concern, problem-solving state lawmakers have started introducing bills to create a second currency, one of gold and silver. Sounds like a fringe concept right? 

Well, not entirely. In the 2011-2012 legislative cycle, 17 states saw some form of the legislation introduced, either implmenting a second currency or at least prompting a study of one. The famous (and failed) "doomsday bill" in Wyoming included one such study. Utah already passed its version last year, so you can now start paying taxes in gold eagles—if you have any that is.

And now it looks like Missouri may join Utah in the ranks of the bimetallic. Through just a voice vote, the AP reports that the state House passed a measure to recognize gold and silver as legal tender in the state. That means, much like Utah, states would have to accept the metal as tax payments, though no one else has to accept anything besides the dollar. The bill must pass the House once more before it can head to the Senate. You might call it the yellow brick road to becoming a law.

 

 

Comments

JFK started to have the Mint print US Notes instead of Federal Reserve notes. Now I am no fan of his, but Dr Paul is correct in stating that Federal Reserve notes are just fiat currency.

I don't know if the states are in the pockets of the gold industry, but I can see why they wish to have our monies backed by something other than faith.

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