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Worried states consider gold and silver exchanges to protect from Fed policy

By Catholic Online (NEWS CONSORTIUM)
April 9th, 2013
Catholic Online (www.catholic.org)

A dozen states are considering bills that would once again authorize the use of gold and silver coins as legal tender. The move comes as long-term confidence in the dollar erodes.

SALT LAKE CITY, UT (Catholic Online) - Utah has already authorized bullion as currency, and Arizona is about to follow suit. Other states, mostly conservative, are breaking away from absolute dependence on fiat currency.

There's plenty of reason to worry about the dollar's stability. Unusual moves by the Fed to stabilize the economy combines with moves by other countries such as China, to unseat the dollar as the world's reserve currency, are undermining confidence.

In Texas, Gov. Rick Perry has given his support to a bill that would transfer the state's gold reserves from a bank in New York back to a repository in Texas itself. The bill would establish the Texas Bullion Depository and would store about $1 billion in gold bars. It would also accept deposits from the public.

There is also a growing call to return to the gold standard, linking the dollar's value to bullion.

Allowing consumers to convert their currency to bullion that will not lose value as a result of questionable government policies would build confidence by giving people control over their money.

Further state legislation is being considered in Utah that would eliminate capital gains and state taxes on bullion will make silver and gold a more attractive option for investors.

Still, there are no plans to resurrect gold and silver coins for the purpose of buying groceries or gas. However, people are trying. Some Utah residents have asked to pay their taxes in gold or silver. Direct payments to the state would eliminate intermediaries who convert bullion to fiat currency in exchange for a steep percentage of its value.

The state has formed a task force to consider how to accept the bullion for payments, however the fluctuating value of gold and silver makes a plan challenging to devise.

Ultimately, people are concerned that dollars backed by nothing but federal edict are too flimsy as a currency and would feel safer being allowed to directly invest in bullion, which is a hard currency and will never decline in value below a reasonable point. Bullion also acts as a hedge against inflation, by automatically increasing in value as inflation accelerates.

For now, it seems unlikely that gold and silver will return to circulation anytime soon. However, the movement is certainly afoot and wise investors should take note.

Article brought to you by: Catholic Online (www.catholic.org)