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CNNMoney: States Consider Accepting Gold, Silver Coins as Tender

By Michael Kling   |   Thursday, 07 Feb 2013 08:02 AM

Concerned about a collapse of the dollar, a growing number of state legislators are urging their states to issue their own currencies.

Politicians in 13 states in all are pressing their states to either allow or consider alternative currencies, according to CNNMoney. Proponents — generally Tea Party members and conservative Republicans — worry that the Federal Reserve’s easy monetary policy will cause hyperinflation like Germany’s Weimar Republic after World War I.

The Constitution prohibits states from printing paper money or issuing their own currency, but says they can make “gold and silver coin a tender in payment of debts.” So states are eyeing gold and silver coins.

‘Financial War’ Could Wipe Out 50% of Your Wealth’

Utah became the first state to allow its own alternative currency last year when it began accepting gold and silver coins from the U.S. Mint, including American Gold and Silver Eagles, CNNMoney reports. The coins may be exchanged for their fair market value of the precious metal they contain.

Under proposals in many states — including South Carolina, Washington, Minnesota, Iowa, Georgia, Idaho and Indiana — gold and silver coins would be accepted as legal tender based on their metal content. Many of the proposals would allow state residents to use the coins to buy and sell goods and services.

Most people probably won’t want to carry around a pocketful of valuable coins, and determining the value of numerous coins from around the world would be tricky. So states would probably create electronic depositories and accounts for the coins, said Edwin Vieira, an alternative currency proponent and attorney specializing in Constitutional law, according to CNNMoney.

Utah Gold & Silver Depository is already working on a system to link customers’ gold accounts to their debit cards. When customers use their debit cards, gold or silver in their accounts would be moved.

Some oppose the whole idea.

If states issue and accept gold and silver coins, they could debase the dollar and perhaps even eventually prompt a national default, said David Parsley, a professor of economics and finance at Vanderbilt University, according to CNNMoney.

“The single currency in the United States is working just fine,” Parsley told CNNMoney. “I have no idea why anyone would want to destroy something so successful — unless they actually wanted to destroy the country.”

The Virginia House of Delegates recently approved a bill to study how to create metallic-based money to be ready for a financial apocalypse.

“This is a lifeboat study. What happens if?” said Robert Marshall, the delegate who proposed the bill, according to The Washington Post.

Declassified: ‘Financial War’ Could Wipe Out 50% of Your Wealth’

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