SC news reporter gets in a bit over their head... :)

[nonothing]

Wow, just read this story from a FOX affiliate:

http://www.midlandsconnect.com/news/politics/story.aspx?id=616413

1st, there aren't even enough details in the story to make a reasonable assessment of the legislation in question (i.e., what would the precious metal currency be denominated as - $ or weight?)...

2nd, to show just how clueless this professional journalist is, who do they cite to give a pertinent opinion on gold currency? Perhaps a classically trained economist whose expertise lies in the field? Nope. A jeweler. "Two local jewelers tell WACH Fox..."

Seriously? I can just see the guy thinking "man, I don't know anything about gold. <types in yellowpages.com - enters gold as a search term for his city and hits enter> "Ah, here we go! A jeweler. They work with gold all day long! Nailed it!"

[Zombie]

i wonder if the fed will allow state currencies. if tings get bad enough i have no doubt underground currencies will develop.

[nomad]

bring on the kongbucks!

[themuzicman]

If memory serves, the US constitution reserves this for the federal government.

[Cow Poke]

i wonder if the fed will allow state currencies. if tings get bad enough i have no doubt underground currencies will develop.

Bring back the Kirtland Anti-banking society!!!!!

68471

[seanD]

i wonder if the fed will allow state currencies. if tings get bad enough i have no doubt underground currencies will develop.

Allow? I wonder if things get so bad the federal government has any say in the matter. Doubt it, unless they want a civil war. Me thinks the fed will have their hands full with enough civil unrest than to have to deal with a full-out civil war against the states. Utah already recognizes gold and silver as legal tender (http://www.moneynews.com/StreetTalk/Gold-Silver-Legal-Currency/2011/05/27/id/398039), and other states are stepping up the plate as well.

[nomad]

i don't see how the fed can _disallow_ it. afaik, law requires US dollars (and all related coinage and paperware) to be accepted as legal tender, but does not disallow anything else also being used as such.

however, this is a lot more complicated than it appears... federal law is definitely not going require, for example, a utah paper dollar to be valid currency in new york. it would take a strong state economy to support that kind of widespread adoption, and i don't know of any state economies that strong. more likely, we would see a flight into euros, or yuan, or yen, something like that, that is already established, similar to the de facto use of american dollars in third world countries. (using gold and silver as currencies is a step backwards IMHO.... a gold-BACKED currency, sure. But gold itself? no thanks.)

[seanD]

I agree with you in an ideal situation, but this is not anywhere near and ideal situation. I don't see how the floodgates could be stopped in this situation the more the fed devalues the dollar through monetization, something that we now is inevitable after Bernanke just announced this to the world. Now everyone knows the dollar is doomed and that inflation is a definitive factor in our future (though we knew this already, it's now publicly admitted), so I don't see a situation making it impossible that more and more states rebel against this by adopting gold and silver as legal tender. Once you get a trend like this going, no telling what will happen and where it will lead.

[theblueprint_Ni]

I loved that video (http://www.youtube.com/watch?v=2NJnL10vZ1Y) clip of Ron Paul owning Bernanke on gold being valued as actual money.

Ron: "Is gold money?"

Ben: "...."

Ron: "....?"

Ben: "...No..."

Ron: "Then why do central banks have stockpiles of it?"

Ben: "..uh..tradition...."

Ron:
"Six thousand years of "tradition" has made the world go round"
"I yield."
":smug:"

[joel]

If memory serves, the US constitution reserves this for the federal government.
The Constitution says "No state shall [...] coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts"

So a state cannot mint gold or silver coins.
The state cannot print and emit "bills" or notes (i.e., paper money. Note this distinction between coining money and paper money.).

But it seems that a state can make gold and silver legal tender. Presumably they could also do something like establish "1 oz of gold" as the official unit of account, and private mints could produce coins, though the state can't mint them.


The Constitution deligates to the Congress the power "To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;"

Note that "regulate the value" refers equally to its coin and foreign coin, and is in the same category as fixing the standard of weights and measures. The idea was to fix units, so Congress defined "1 dollar" at about 0.77 oz of silver. And once set, it should never change, like the unit of "ounce" itself, or "inch", etc. It is simply a defined unit of measurement.

Note also that Congress is not delegated the power to "emit bills of credit". Thus dollar bills are unconstitutional.