Utah just became the first US state to recognize gold as legal tender. Its Legal Tender Act of 2011 allows U.S. minted gold and silver coins to be recognized as legal tender in the value that reflects the market price for gold and silver.
Currently, the one-dollar US American Eagle silver coins would be worth $38 each, using an example provided by the NYTimes.
People in Utah are not compelled to accept gold and silver coins at market value, but they’re now able to, according to the law.
“If the federal government isn’t going to do it, then we here in Utah ought to be able to establish a monetary system that would survive a crash if and when that happens,” Lowell Nelson, interim coordinator for the Campaign for Liberty in Utah, told NYTimes.
Craig Franco, a coin dealer south of Salt Lake City, said he’s preparing to create a Visa credit card based on gold depositories that would allow people to more conveniently use gold as tender.
Utah isn’t the only place to distrust the US dollar and push for precious metals as legal tender.
Minnesota introduced (but not passed) a bill to “designate gold and silver coin as official ‘legal tender’ in payment of debts under certain circumstances.”
The bill said “the currency emitted by the Federal Reserve System [i.e. the US dollar] has created and threatens to create increasing instability in the governmental finances and private economy of the state of Minnesota.”
North Carolina introduced (but not passed) a bill that would have the state issue its own legal tender backed by the gold and silver in the state’s treasury.
“I think we're in the process of inflating a dollar bubble that could be very devastating,” said the legislator who introduced the bill, reported the News & Observer.
South Carolina introduced (but not passed) a bill that would replace the US dollar with gold and silver in as legal tender in the state.
The Germans felt their system wouldn't collapse, but it took a wheelbarrow of money to buy a loaf of bread in the 1930s. The Soviet Union didn't think their system would collapse, but it did. Ours is capable of collapsing also,” said the legislator who introduced the bill, reported CBS.
Idaho introduced (but not passed) a bill that would allow people require only gold or silver as payment.
Georgia introduced (but not passed) a bill that would have the state government only accept US minted gold and silver coins for payment (i.e. tax payments).
Meanwhile, the world is also slowly pushing to diminish the role of the US dollar.
China and Russia have already formed an agreement to use their respective currencies for bilateral trade. Previously, these countries used the US dollar for bilateral trade.
Russia, in fact, was already pushing for the denomination of its energy exports in the Russian ruble back in 2006.
Countries with big foreign exchange reserves – like China and Arab oil producers – are also frantically trying to prop up the euro currency as a dollar-alternative for their investments. Besides the euro, they’ve diversified to assets denominated in other major currencies like the Australian dollar and Canadian dollar.