Sean Fieler and Jeffrey Bell, respectively the chairman and policy director of the American Principles Project, say the Federal Reserve has become completely unaccountable — and one way to rein it in is by making gold legal tender again.
"Members of Congress seeking to restrict the Fed's power need to consider what oppositional force is truly capable of hemming it in," the pair write in The Wall Street Journal.
"One answer is a revived gold standard, which would once again obligate the Fed to redeem dollars for gold at a fixed rate," a move that would allow gold a level playing field on which to compete with the dollar.
|Gold coins and bars
“When the Fed was created in 1913, the gold standard limited its power as did the balance between the 12 reserve banks across the country and the Federal Reserve Board in Washington,” Fieler and Bell note.
“Moreover, the Federal Reserve Act imposed a hard constraint on the Fed's balance sheet: 40 percent of the Fed's notes had to be backed by gold.”
Utah has already taken the first step in this direction by passing a law formally recognizing gold as legal tender.
"But for the playing field to be truly leveled, all taxes on gold transactions need to be removed and individuals and businesses need to be permitted to report their financial accounts in gold," say Fieler and Bell.
Moneyweb reports that because Utah's state tax code now considers U.S. Mint gold and silver coins as currency, no capital gains or other state taxes will be levied when the coins are exchanged.
However, the gold and silver coins are still only worth their face value despite record gold and silver prices.
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