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Ear to the Ground

Thar Be Gold in Them Hills

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Posted on Mar 3, 2011
Flickr / J. Stephen Conn (CC-BY)

Utah gold: Here we see the gilded statue of the angel Moroni atop the Mormon Temple in Salt Lake City.

You know Fox News is all over this story: The Utah House of Representatives is fixin’ to vote on a measure that would make gold and silver coins a viable alternative to the boring—and inflation-prone—forms of currency currently in national circulation. Bonus: Utahns could even pay taxes with these shiny coins!

The bill’s author, it should be noted, is affiliated with the tea party.  —KA

Fox News:

The legislation, which has 12 co-sponsors, would let Utahans pay their taxes with gold and also calls for a committee to study alternative currencies for the state. It would also exempt the sale of gold from the state capital gains tax.

The bill cleared a state legislative committee on Wednesday, the first of 11 similar bills in statehouses across the country to do so. If the bill clears the House, it would have to pass the Senate before the governor could sign it into law.

Attorney and Tea Party activist Larry Hilton, author of the original bill, said he doesn’t foresee any roadblocks.

“There’s enough uneasiness going on in the economy to trigger people to feel that, hey, having a little Plan B, kind of a backup system, is not a bad idea,” he told FoxNews.com.

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PatrickHenry's avatar

By PatrickHenry, March 5, 2011 at 7:51 pm Link to this comment

Gold and silver have served as ‘money’ for over 5000 years.  It can’t be counterfeited, it doesnt rot, burn or degrade. 

Internationally recognized and accepted it was by precious metals physical backing that fiat currancy was initially accepted.

American gold and silver eagles from the U.S. mint are currancy, have face values and can be spent anywhere, legally.  It is their intrinsic value that keeps them from being used as currancy.


Inherit,

Chip all you want, thats what scales are for.


Steve Spradlin,

Some good ideas, alot of bad ones.

A great society takes care of its less fortunate, sick and elderly more than your list provides for.

I would be armed and ready to fight the implentation of alot of what you suggest.  I don’t think I would be alone.

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By SoTexGuy, March 5, 2011 at 2:18 pm Link to this comment

I read an article somewhere (I’ll go look for it) where the author persuasively argued that high gold prices and calls for a return to the gold standard and more were a Trojan horse for a couple of things… mainly a coming catastrophic devaluation of US currency presaged by another gold confiscation.

He argued that the astronomical price for gold was itself enabling a voluntary confiscation, where people were turning in gold for (soon to be even more worthless fiat money).. when the central banks and key players had enough of the stuff the currency would be devalued.

The author also speculated on other ways the government would get us to give our gold and silver.. I don’t recall if taking it in as payment for taxes was one of them..

Myself, I don’t believe in hoarding gold.. you can’t eat it anyway.. but if you are into the whole gold-as-life thing then these proceedings might alarm you!

Adios.

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Anarcissie's avatar

By Anarcissie, March 5, 2011 at 12:30 pm Link to this comment

With modern technology, it would be pretty easy to produce an incorruptible metallic coin.  I am not sure, but I believe the coins now being produced are accepted by dealers without assay, in which case the technology must have already reached a point where those who care and know what they’re doing are pretty confident about it.

There are many problems with money based on commodities.  Unfortunately, there are even more problems with fiat and credit money—especially the almost irresistible urge to solve present problems by taxing the future, which seems to afflict almost all governments and ruling classes.  If you read history, it is not the poor who vote to empty the treasury, but the rich, and we in the U.S. are living in a plutocracy or kleptocracy.

So this is an unsolved problem, and when the government appears to be degrading the currency in a massive way, people are going to go back to commodity money or seek other hard stores of value.  What else can they do?

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By Steve Spradlin, March 5, 2011 at 8:59 am Link to this comment
(Unregistered commenter)

Allowing gold and silver as legal currency is symbolic. We need to have the treasury issue “greenbacks” in $100,000, $50,000, $10,000, $5,000 and $1,000 sizes to retire the $14 Trillion national debt. No more interest, and our debtors would have non-interest bearing notes/currency. So, what can they with it except spend it on US products… Can you see the economy grow???

In addition, make it illegal for a foreign nationals to own or lease property in the US. Not only would our economy grow, but we would have a full employment society, negates much of the need for government spending.

1. Require all green cards to be cancelled and all persons not citizens to leave the country over a 48 hour exodus.

2. Major program to become energy independent by opening up the Bakken oil reserves, building 15 new refineries in the US, Convert Coal to synthetic fuel as did Germany in WW II to bring fuel prices down to $0.59/gallon.

3. Eliminate All taxes at State, Local, Federal levels. ALL Taxes, including property tax, sales tax, all fees and special licenses, all income taxes and replace with a single national sales tax of 23%

4. Eliminate all Social Security and Medicare; require each family to have a savings account to be responsable for their own medical and retirement costs.

5. Employers, because they no longer pay SS or Medicare/Medicaid, and there is no income tax,  can cut wages by 25% or so with no loss to the employees.

6. Restructure Welfare to be a training program. 6 month maximum. Trained to help meet the needs of a full employment society. Even if the job is a janitor. With the economic growth, we will need all kinds of people to do all kinds of jobs.

7. Restructure the legal system to put career criminals to death based on a point system. For other prisoners, put them to work in the fields so they work for their keep.

8. Eliminate the Department of Education, the Department of Energy, the and the IRS.. the recommendations above negate their need. Privatize education. Kick out problem and unpatriotic children, . REMEMBER, not everyone belongs in school. Put non performing blacks and other underperformers into working in the fields.

9. Require all law suits to be reviewed for merit, fine the lawyer who brings a “nuisance” law suit. Also change tort law so that the loser pays all court costs of both the plaintiff and the defendant. Limit awards to actual loss; establish a formula to determine loss value.

10. Eliminate the Federal Reserve, audit their books and prosecute the owners, as appropriate, for market manipulation.

11. Make Drug distribution a capital offense. Fine all drug users $250,000 for each occurrence.

12. Close public housing and restart the program to give each family 60 acres to farm on, teaching them be self sufficent or die.

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By Inherit The Wind, March 4, 2011 at 11:44 pm Link to this comment

Gold is a commodity with a fluctuating price, just like anything else.  But with its scarcity and production not keeping up with world-wide production in general, switch all the world currencies to the Gold Standard will kick off a HUGE recession as the price of money (IE, gold) keeps increasing.

And gold is just as easily susceptible to corruption as paper money. It’s called clipping and debasement. “Clipping” is shaving a little metal off each coin.  Do it enough times and you’ve created a lot of gold..But you’ve really stolen it.  Reeded edges were invented to prevent that

And governments have NO problem debasing gold.  Just make the gold “Crown” or “Sovereign” a shade smaller but say it’s a “Crown” and you’ve debased the currency just like printing more dollars.

Another mis-interpreter of economics has his crackpot theory bite the dust.

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Anarcissie's avatar

By Anarcissie, March 4, 2011 at 10:15 pm Link to this comment

I think Section 10 just prohibits the states from coining their own money, on the theory that it would result in confusion.  It was fairly important to the commercial and industrial element among the Founders that trade and finance be facilitated.  Madison makes note of this in the Federalist Papers.  (Google knows all!)

So Utah can’t issue Utah gold dollars, but possibly the West Bank of the Great Salt Lake can.

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PatrickHenry's avatar

By PatrickHenry, March 4, 2011 at 5:40 pm Link to this comment

The federal government wishes it could change the Constitution

The Contract Clause appears in the United States Constitution, Article I, section 10, clause 1. It states:

“No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

The company who sold liberty dollars from copper, silver and gold did so for years without any harrassment from the government, they are now worth much more than what they sold for, I still think they sell them.  It wasn’t until a Ron Paul liberty dollar was coined prior to the last election that the treasury agency came down on them and claimed the phrase ‘Trust in God” is too close to “In God we trust”.  The case is still in court. 

http://coins.about.com/od/coinbuyingadvice/qt/libertydollars.htm

http://www.thestreet.com/story/10390631/raid-on-ron-paul-dollar-maker.html

In the case of Weimar style inflation, keep your paper fiat, I’ll take silver and gold eagles from the U.S. mint not the federal reserve..

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Anarcissie's avatar

By Anarcissie, March 4, 2011 at 2:22 pm Link to this comment

The State of Utah is not proposing the issuance of currency.  At least as far as the news story goes, they’re saying they will accept payment of taxes and fees in gold and silver.  I take it they would accept them at spot prices.  I don’t see the big deal here.

A number of groups have set up various kinds of alternative money systems.  As far as I know the only ones who got in legal trouble were those who closely imitated physical U.S. currency.  I don’t see anything in the Constitution forbidding the use of other kinds of money, but maybe I didn’t look hard enough.  Anyone got a reference?  Most of the money stuff seems to be in Article I, Section 8.

I suppose mention of the Tea Party was ritually required.  Did all your knees jerk properly?

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By SarcastiCanuck, March 4, 2011 at 1:10 pm Link to this comment
(Unregistered commenter)

Jeeze,my Utah taxes cost me 450 dubloons.

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By Big B, March 4, 2011 at 11:19 am Link to this comment

How will the mormons feel after they start coining gold and the current comodities bubble pops? In one day, the value of their new money will be cut in half (or worse)

This article does however bring to light an interesting side note that is going on in america right now, and that is the movement by some states to succeed from the union, for fear of being dragged down by the stumbling behemoth that is the USA. Only a few states have the resources and locale to pull it off. And Utah ain’t one of ‘em.

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By louiss123, March 4, 2011 at 10:57 am Link to this comment

David and inherit,
It will be interesting to read the posts about this one. Sound money will be lost on
the folks in here(most). That pesky constitution is seen as outdated. I wish we
would give RP four years just see what would happen. Now that would be true
hope and change.
Sound money
the concept of liberty actually discussed
no goofy wars(less body bags)-(and civilian deaths)
anyway..like an alcoholic..perhaps we have to hit bottom before we act in a big
way.
Jeez..can we really see 4 years of Obama or Newt?

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By davidslynch, March 4, 2011 at 9:33 am Link to this comment

Inherit The Wind is spot-on.

Personally know a man who was part of a company that offered alternative
currency in the form of silver and gold coins, as well as certificates backed by
precious metal (as our currency once was).

That man is now in jail.

Report this

By David Lynch, March 4, 2011 at 9:19 am Link to this comment
(Unregistered commenter)

Inherit The Wind is correct.

I personally know a man who was part of a company that offered an alternative
currency, which included silver and gold coins, as well as certificates that were
actually backed by precious metal reserves, like our currency once was.

That man is now in jail.

Report this

By Inherit The Wind, March 4, 2011 at 7:30 am Link to this comment

They need to read the Constitution. Only the Federal Government is authorized to issue money.

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By RHONDA, March 4, 2011 at 3:54 am Link to this comment
(Unregistered commenter)

Why do I get the feeling this has something to do with the the wealthiest folks getting more and the rest of us just going down?

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By Tom Hickey, March 3, 2011 at 11:21 pm Link to this comment
(Unregistered commenter)

What is the seignorage, and how do they intend to deal with the fluctuating price
of gold and silver? Or have they thought about this?

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