Utah Coin Act
Utah Coin Act
Recently, I was interviewed on the Fox Business Channel regarding the Utah Legal Coin Act. Here is a little background and some interview questions.
For the first time since 1971, gold and silver are once again considered legal tender in at least one part of the United States. The State of Utah passed the “Utah Legal Tender Act,” which “recognizes gold and silver coins that are issued by the federal government as legal tender in the state and exempts the exchange of the coins from certain types of state tax liability.”
The law, signed by Governor Gary Herbert on March 25, is a voluntary system that provides an alternative to the fiat-based Federal Reserve notes that are created out of thin air in unprecedented proportions.
The most significant change from a practical perspective is that the Utah’s state tax code now considers gold and silver coins issued by the U.S. Mint as currency rather than an asset, which means since it is considered money it cannot be taxed. However, federal taxes still apply on these transactions.
1. What is this Utah Legal Coin Act about?
The Utah Legal Tender Act (HB 317) is designed to reinstate gold and silver coin as an optional medium of exchange in Utah intrastate commerce. The bill recognizes the inherent and inalienable right of citizens to voluntarily employ these time-tested, inflation-proof, complementary currencies to foster economic development throughout the state. The bill draws its authority from Article 1, Section 10 of the United States Constitution which provides that no state shall make anything but gold and silver coin a tender for payment of debts. Grounded in long-standing principles enshrined in the supreme law of the land, this statute addresses current, pressing monetary issues in modern American society—issues to which gold and silver coin solutions are uniquely suited.
2. Why do we want/need sound money?
Because the founders of our nation had experienced first-hand the ills attendant with unbacked fiat currency, they provided in Article 1, Section 10 of the United States Constitution that no state is to make anything but gold and silver coin tender for payment of debts. Unfortunately, we’ve departed from the wisdom they imparted, and embraced a medium of exchange that has no intrinsic value whatsoever. The value of today’s dollar is upheld by governmental edict, backed only by the indebtedness of our nation and its citizens. Because of sharp increases in our money supply, our national debt is on an upward trajectory, set shortly to eclipse our gross domestic product. Since there is no historical precedent for a totally fiat money system such as ours ever lasting more than a few decades, prudence dictates that alternative, sound means of exchange be put in place well in advance of any potential crises, such as those endured by the fiat-financed nations and empires of the recent and distant past.
Even absent the specter of catastrophic consequences, an alternative sound money system confers many benefits on citizens and state governments alike. Such a system serves as a refuge from the ills that fiat money produces, including the insidious “inflation tax” that our current monetary system imposes. Consider that the U.S. dollar has lost more than 95% of its purchasing power since decoupling from gold and silver backing. By contrast, sound money systems of the past continued virtually inflation-proof for centuries on end.
3. Are there other states that are looking at something similar?
Virginia House Joint Resolution 557
Georgia Constitutional Tender Act
Ohio Honest Money Project
Idaho Silver Gem Act, Bill No. 633
South Carolina House Bill No. 4501
Missouri House Bill No. 561
Washington House Joint Memorial 4010
Colorado Honest Money Act (HB09-1206)
Indiana Senate Bill No. 453
Montana House Bill No. 639
New Hampshire Gold Money Bill 1.1.
4. Why are the states doing this and not the Federal Government?
Because of the co-dependent relationship between Congress and the Federal Reserve, the likelihood of any sound money reform coming out of Washington is remote indeed. Individual states, exercising their sovereign authority, are best equipped to restore sound money to its prior status as a trading currency. So look for a sound money comeback on a state-by-state basis. It makes sense to first support states that are well positioned to make sound money a reality today. Then as the movement gains momentum, reluctant jurisdictions will see the advantages of embracing sound monetary systems.
More information can be found at www.utahsoundmoney.org.
We have received feedback on this from many people so far and many are of the belief that Gresham’s Law will mean that no one will spend real money (gold or silver) into circulation. We will not argue with the concept but will make the case that the market will decide and perhaps there will be some who want to “spend” their profits into the community. For example, when silver was approaching the $50 level there could have been (in theory) people who wanted to take advantage of that price and spend some profits for some good or service.
Also, we think that some merchants favorable to sound money principals might offer a discount for real money being used in a transaction. We can envision two prices—a silver price and a fiat price. Again, the market will decide and it is our hope that real money circulates enough to encourage other states to adopt such measures.
We find it interesting that some of the opponents of the law come from the CPM Group:
Opponents of the law warn such a policy shift nationwide could increase the prospect of inflation and could destabilize international markets by removing the government’s flexibility to quickly adjust currency prices.
“We’d be going backward in financial development,” said Carlos Sanchez, director of Commodities Management for The CPM Group in New York. “What backs currency is confidence in a government’s ability to pay debt, its government system and its economy.”
Larry Hilton, a Utah attorney who helped draft the law, disagrees and says the gold standard would restore faith in American money at a time when spiraling debt is weakening confidence.
“We view this as a dollar-friendly measure,” Hilton said. “It will strengthen the dollar by refocusing policy matters in Washington on what led to the phrase, ‘the dollar is as good as gold.’”
We, of course, side on the principle of sound money and think the U.S. has not instilled confidence for a very long time. I am scheduled to fly to Utah and be with Governor Gary R. Herbert for a ceremonial signing of this law. We again are hopeful that other states will follow and the principle of fair weights and measures will once again be restored to the people.
Summary
We applaud Utah and are anxious to see if this is a moral victory, or actually becomes a trend. In our view a great deal depends upon how the implementation process proceeds. David Morgan interview the creator of the bill and this will be published in the July issue of The Morgan Report.
David Morgan
Become a member today: http://www.silver-investor.com/amember/signup.php
http://bcove.me/b7kn3set
so arent you really “silver not investor”, since you sold out
and are short silver.
seems to me that isnt what the title you walk around with implies.
“We’d be going backward in financial development,” said Carlos Sanchez, director of Commodities Management for The CPM Group in New York. “What backs currency is confidence in a government’s ability to pay debt, its government system and its economy.” ?
Right!,And there is none of that left Mr. Sanchez.
What is really backing the FRNs is the taxman vested coercive powers to take a sizable cut out of your hard earned real net worth all the way until you die.
i collect coins!
they are fun and go up, its an established field.
maloney is full o’ baloney.
Hi,
Silver Up, I buy silver;
Silver Down, I buy silver;
I F..k the banksters, I buy silver!
Silver is the King,
SILBER DASS BESSEIRE GOLD
Tchuss,
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The next step is obvious to the casual observer. All that need be
done is for the Utah State Treasury to convert Tax Receipts into
gold and silver eagles as they arrive each month or quarter year.
Utah can contract with an existing Primary Dealer or establish its
own Dealership with the U.S. Mint. This is totally independent of
the Federal Reserve Bank System; it is all under Contract Law.
As bills are presented to the State for payment of of goods and
services delivered by contractors, each can be satisfied with pay-
ment in FRNs and/or Coins as desired by the recipient. During the
time between bill presentation and payment, the State gains the
increase in FRN price of the metal coins.
This payment plan can be extended to the pay of state employees.
Voluntary election of gold, silver, and paper currency portions can
be done one or more times each year. Just a few more boxes to
check on your State equivalent W-4 form.
To make this work digitally, all that needs be done is to Charter a
Utah State Bank to keep the metals in its vault as backing for the
gold and silver checking accounts. Checks drawn on the accounts
are thus backed by gold and silver and redeemable for same, just
as gold and silver certificates were. Savings accounts need pay no
interest since there is no counter-party risk to gold and silver. The
annual appreciation in the gold and silver price, counted in FRNs,
should be enough to satisfy those depositors who cannot get the
difference between price and value straight in their minds.
Since gold and silver require no enticement of interest payments,
the Utah State Bank Savings Accounts are the perfect place to
keep your retirement savings. After your working decades are over,
the value you deposited is the same as the value you withdraw in
retirement years. No “growth” by matching funds or other means
is necessary simply because there is no “theft” depreciation due
to Fed inflation of the Paper Money Supply.
The possibilities of embezzlement are no more or less than with any
other accounting plan. Vigilance, and swift punishment for violators
of the Public Trust, works wonders in limiting this problem to only
the most brazen or stupid. Since those two “qualities” seem to be
mutually supporting, there may be an initial need for a number of
hangman’s platforms to cull the early transgressors. Nothing like
bringing back some of the finer traditions of the Old West such as
honest money for honest dealings, and swift justice for all others.
Utah stands unique among the several other states considering
such proposals. Setting the example for breaking chains binding
them to the Anglo-American Banking Cartel, the fine citizens of
Utah can be proud of their independence under the banner of the
Tenth Ammendment.
Defending those rights will be necessary from the start, because
the bureaucratic monsters inside the D.C. beltway will feel fatally
threatened and will lash out as trapped animals; and well they may
feel so in a trap of their own making. Rest assured, any aggression
can be met by the citizens of Utah holding the State Flower in one
hand . . . and the State Firearm in the other.
Fare thee well, my good and brave neighbors.
[img]http://i177.photobucket.com/albums/w209/mrcrowlee/avatars/denarius.jpg[/img]
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