Wow, Utah bill could allow citizens to use gold and silver as legal tender!

Although not the first of it's kind, it is apparently the most likely to succeed.  Fox News reports something that makes me very excited and very hopeful over a remarkable opportunity that not only allows the States to flex their 10th Amendment rights, but literally pioneer a movement that could usher in stability and competition in the world!  In Utah considers return to gold, silver coins:

The Utah House was to vote as early as Thursday on legislation that would recognize gold and silver coins issued by the federal government as legal currency in the state. The coins would not replace the current paper currency but would be used and accepted voluntarily as an alternative.
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. 

Critics of the gold standard say it limits countries' control over its monetary policy and leaves them vulnerable to financial shocks, such as the Great Depression. But supporters argue that the current financial system's dependence on the Federal Reserve exposes the value of U.S. money to the threat of inflation. 

For those few of us (for now) that have been pointing out the flaws of the current system and are able to trace many of the economic shocks to our monetary policy facilitated by fiat currency, this is truly exhilarating news.  There will be critics, but the criticism is purely because decades and decades of propaganda has conditioned the American public to believe that using sound money is a relic of the past.  Nothing could be further from the truth.

Let me tell you first and foremost, humans have used gold/silver and variations of sound money for thousands of years.  Thousands!!  We have only been using paper un-backed currency since 1971.  In terms of civilization and length of time, it is a drop in the bucket.  Secondly, most have been brain washed to believe that we cannot use sound money because there is a limited supply of it and this elasticity prevents the economy from expanding.  Yet for thousands of years as economies grew and grew there never seemed to be a shortage.  Secondly we can use all sorts of valuable materials for money, gold and silver are just likely variations.

Lastly and far more importantly, you just have to ask yourself why governments and academics insist that we should continue using paper money.  In the Fox article the critics speak clearly, it limits control over monetary policy!   In other words, it prevents someone like Ben Bernanke from buying 1.5 Trillion worth of toxic assets, handing out gifts to his banker bodies or printing money to buy treasuries allowing our Government to sink deeper and deeper into debt!!  In other words, to put it very simply, it prevents Government institutions from exercising financial control over it's citizens.   This is why FDR confiscated private ownership in 1935 during extreme hardship and why Nixon ended Bretton Woods in 1971 during a massive inflationary episode.  America did not drift towards paper during positive economic times, but rather during hardship, hardship incidentally that was ushered in by manipulating the money in the first place.

For example, the Depression in 1930s was caused primarily because our central bank was allowed to print money on top of existing gold supplies virtually unchecked because of the collaboration with the English central bank prevented gold outflows (for a while).  The Federal Reserve was only created because previous money printing episodes resulted in banking panics and banking executives were getting frustrated over constantly going out of business.  In the 1970s Nixon ended gold redeeming capabilities because Europeans kept turning dollars in for gold causing massive outflows out of the country.  Just 80 years of history shows a very clear picture of those in power trying to undermine the people's currency and move towards a single unified currency.

Somehow through educational system enough people have been convinced that convenience and elasticity are more important than value.  Yet ask the working poor, fixed income seniors and savers what is more important?

Twelve other states have offered similar proposals: Georgia, Montana, Missouri, Colorado, Indiana, Iowa, New Hampshire, South Carolina, Tennessee, Washington, Vermont and Oklahoma.

This is extremely exciting and for many of us could prove to be our next home.   States that will move to allow competition in currency and possibly nullifying ObamaCare can become extremely attractive to those citizens looking to escape the choking effects of paper currency and Federal over-reach.

If Utah passes this bill then it will be extremely exciting to see what happens in terms of currency competition within the state.  My hunch is that if people *can* pay taxes it would mean that most big vendors will start pricing goods in gold and silver too.  We might see parallel prices in many places, one marked in Federal Reserve Notes and one marked in ounces of gold or silver.  

If history is any indication whatsoever, then we can look at California in the 1800s when many places took Lincoln's Greenbacks, but most vendors in California only accepting gold coins.  In other words, why bother taking a paper currency whose value is constantly dropping when you can just take a store of value that never changes.  For instance a vendor can price a loaf of bread in 1/10th ounce of silver and be done with it.  In parallel the loaf of bread in federal reserve notes can climb from three, five, ten, etc.  As more and more people switch to using value currency the threat of rapid runaway inflation diminishes.  In terms of the persistence and annoying elasticity demand, if wheat becomes more available and bread becomes cheaper to produce then price in terms of silver will drop to 1/15th of an ounce.  Now consider what tremendously positive impact this will have on the working poor or those on fixed incomes.  Sound money is a beautiful thing (Of course I simplify the scenario and a significant adjustment will be required in order for people to think and view prices, salaries and values in competing currency, but a slow and gradual process will allow for a smooth transition).

Interestingly enough having competition in states threatening the dollar could actually inspire our central bank to stop printing.  If Ben Bernanke knows that people now have a choice of currency to use and keep he will think twice before flooding our economy with dollars.  It becomes a win-win situation for everyone, especially the consumer.  Competition is also a beautiful thing.  

What is really required for this country to become the pioneer and set a shining example for the rest of the world is for Washington DC to move in the same direction..  It is absolutely imperative that in 2012 any candidate for President must talk about currency and all prospective Congressmen/Senators must support the idea of competitive sound currency. 

Perhaps then we will see the miserable experiment of fiat currency come to an end sooner than later.  With the dollar currently threatening multi month/year lows and Europeans/Chinese contemplating to move away from the US Dollar this kind of news can't come fast enough.