Skip to comments.Bill Allowing Gold and Silver as Money; Bureaucratic Nightmare?
Posted on 03/30/2013 12:32:38 PM PDT by Kaslin
I have encouraging news in the state of Arizona where lawmakers back gold, silver as currency.
The measure is Arizona's latest jab at the federal government, which prohibits states from minting their own money. It also reflects a growing distrust of government-backed money.
The bill, which advanced in a 4-2 vote by a House committee Monday, states that gold and silver should be legal currency not subject to tax or regulation as property. The Republican-led Senate gave the bill its blessing in February in a 17-11 partisan vote.
The bill would let people use the precious metals as money as long as businesses agree to take them. If made law, it would take effect in 2014.
Democrats oppose the measure. They say it would be a bureaucratic nightmare because businesses don't have the equipment to determine the value of gold and silver.
In the sake of full disclosure, I own gold, silver, platinum, as well as shares in various mining corporations.
The problem with this is that American Eagle gold coins are already legal tender at face value, under the power of Congress to coin money and regulate the value thereof.
So, Arizona does not need to do anything to make a one-ounce gold coin legal tender for $50, and they cannot increase its legal tender value under the supremacy clause.
I will sell you all the goods you want at $50/ounce.
I would also think there is nothing now in the law that prohibits barter. It sounds to me as if people think this is a way to avoid taxes (sales and income) in a transaction.
If the money was loaned, it exists
Money is not tangible. Money is ledger entries.
Congress can’t do jack squat about PMs, unless some foolish coin minter stamps “dollar” or the like on the coin.
If the coin just says, “One ounce fine gold” etc, it’s clear sailing. Under the AZ law, deals will be made in weights of PMs, period. The current value of PMs in dollars, or the value in dollars at a future delivery date, will be up to the private citizens making the deal. That is, the dollar value of PMs will change, but the deal will be “struck” so to speak, at an agreed-upon weight of the PM, no more, no less.
Makes sense to me, and it’s not hard at all. I’ve traveled in Mexican border and tourist towns, and with the help of simple calculators, it’s a snap to buy in pesos or dollars, and get change in pesos or dollars. The daily conversion rate for dollars to pesos is posted at the shop’s front door. If you don’t like the conversion rate, you go to the next shop, so the rates are kept very honest.
This is exactly how it will work when conducting business in PMs. Just look up the daily conversion rate of gold or silver in dollars (or any other currency) and strike an agreement in weight of PMs. If the currency / PM rate fluctuates, so be it. The deal was made in weight of PM, and that’s that.
Gold money ping.
There are one ounce bars of gold and even lesser fractions available for public to buy and use to barter with.
With a name like Hussein, what's to trust?
Backed by what? The only “government backing” has on the Fed’s fiat money is that Congress had mandated that it be used to pay taxes and to settle debts denominated in dollars.
THERE IS NO BACKING, in the normal sense of the word.
We don’t need to use Gold or Silver as currency, we need it as a brake on the printing of fiat money. Wouldn’t it be better if your dollars gained in value as you held them instead of lost value. Limit the dollars printed to the supply of gold and let the value of the dollar fluctuate bases on the value of the gold.
The problem is that as per the old aphorism, “Bad money drives out good”. You would find a big discount on paper money and the price of gold coins would increase dramatically.
Because money can only be lent once? Wow, what a silly thing for him to say.
No, it would be worse.
There are some interesting possibilities here. The first is that specie has a natural ally in non-legal tender ‘scrip’, which is a very controlled currency that acts in parallel with the dollar, and is quite legal.
Since a state cannot issue scrip directly, it would license a private company to do so, being heavily regulated and audited by the state. As a controlled currency, no matter how the dollar fluctuated, the value of the scrip and the prices of what is purchased with it are fixed, changing only on a monthly basis.
So say an object sells for $1 or 1 scrip value. The dollar could experience Zimbabwe-style inflation, but the object would still cost 1 scrip for the entire month. And gold is part of this equation, for its official value could be all over the map, but if its value for scrip was a good deal, it would continue to be a good deal.
So it *always* works to the advantage of consumers. If the dollar is better, they use dollars; if scrip is better, they use scrip; and if just holding on to commodities, like gold, is better, they can do that too.
The Federal Reserve Note we use as money is worth no more than the South’s Confederate dollar. It is merely printed paper.
It’s value is that it is now accepted as legal tender. So was the Confederate dollar for a while. When people stopped accepting it ,it’s value wasn’t worth the paper it was printed on. Neither is todays federal reserve Note.
There is nothing there to back it’s denomination.
The Bonds that back it were printed on the same paper. It too is worthless when it stops being accepted.
Is that day coming? I don’t know, but I will say that our government isn’t doing anything to stop it from coming.
Some businesses have tried paying employees in gold coins. IRS did not take “but we only paid them $50/week!” well.
Tangible (gold silver) is the keyword my crusty FReeper friend. Not this paper entry or digital entry bullcraaape. If one must invest in paper at least keep tangible precious metals in reserve for you, family and grandchildren,
Can you chop it into microns? One Dollar US 1 micron!
Or one grain of gold dust?
Who would even fathom of putting Gold for currency!
6. Far more gold has been sold than really exists (the rest is multiple fictional accounting entries).
7. When/If anyone ever audits Ft. Knox, it's gonna be Surprise, Surprise!