PDA

View Full Version : Gold, Silver Becoming Legal Currency in More States



Axe
05-29-11, 01:47 AM
This looks promising:

http://www.moneynews.com/StreetTalk/Gold-Silver-Legal-Currency/2011/05/27/id/398039?s=al&promo_code=C5B9-1

Article:

A weak dollar, mounting inflationary fears and skyrocketing gold and silver prices are prompting some states to convert precious metals into currencies.

Utah is now allowing gold and silver coins to be used as legal tender, and others may follow suit.

South Carolina lawmakers are proposing a bill that would do just that based in part on concern that present monetary policies may be undermining the national economy.

"I'm no financial expert but I am smart enough to know that you can't keep printing money when it has no backing," says Republican Rep. Mac Toole, according to WACH, the Fox News affiliate in Columbia, South Carolina.

Lawmakers are insisting the move is based on economics and not on political or other reasons.

"For those of you who think this is a way to re-establish secession, the bill was passed in Utah and it's currently law there," says S.C. Republican Rep. Mike Pitts.

Utah has legalized gold and silver coins as currency and has also exempted the sale of the coins from state capital gains taxes.

Utah Republican state Rep. Brad Galvez, who sponsored the bill legalizing gold and silver as currencies, says Americans are losing faith in the greenback, according to the Associated Press.

"We're too far down the road to go back to the gold standard," Galvez says, according to the AP.

"This will move us toward an alternative currency."

The idea seems to be spreading, even if many such measures are more symbolic protests to monetary and fiscal policies as opposed to a more serious push for a new currency.

Lawmakers in Minnesota, North Carolina, Idaho and several other states are proposing measures similar to the one in Utah.

Supporters say the move sends a clear message to Washington: stop printing money and start getting the country's financial house in order.

"Making gold and silver coins legal tender sends a strong signal to Congress and the Federal Reserve that their monetary policy is failing," says Ralph Danker, project director for economics at the Washington, D.C.-based American Principles in Action, which helped shape Utah's law.

"The dollar should be backed by gold and silver, so we have hard money."

Critics, meanwhile, say the move could disrupt the monetary system by making it more difficult for the government to adjust exchange rates when needed.

"We'd be going backward in financial development," says Carlos Sanchez, director of Commodities Management for The CPM Group in New York, according to the Associated Press.

"What backs currency is confidence in a government's ability to pay debt, its government system and its economy."

Some aren't calling for gold to be used as tender but are calling for a return to the Gold Standard, which attaches the value of the dollar to a certain amount of gold.

A return to the gold standard would stabilize the dollar by discouraging hefty fiscal spending as well as preventing the Federal Reserve from printing excess money.

"People know that something is wrong with the dollar," says former GOP presidential candidate and Forbes Magazine Publisher Steve Forbes, who adds "you cannot trash your money without repercussions."

"What seems astonishing today could become conventional wisdom in a short period of time," says Forbes, according to Human Events, a conservative media website.

I guess we'll see how this plays out.

shikamaru
05-29-11, 02:03 AM
Gold and silver are legal tender.

Silver standard would make more sense than a gold standard. Gold and silver standard still has its problems though.

Bimetallism may be better.

David Merrill
05-29-11, 02:37 AM
The plan is to go back to the gold standard at $42.22/troy ounce.

http://img188.imageshack.us/img188/55/pl945643.jpg
http://img690.imageshack.us/img690/7357/pl945644.jpg


Look in the Footnotes.

http://www.federalreserve.gov/releases/bulletin/1108assets.htm

Axe
05-29-11, 02:45 AM
Gold and silver are legal tender.

Really? If that's the case, why would Utah have to write a new law about it?

Do you have a cite?

Brian
05-29-11, 08:09 AM
Gold and silver are legal tender.

Silver standard would make more sense than a gold standard. Gold and silver standard still has its problems though.

Bimetallism may be better.

A Bimetalic standard is the fatal flaw to the old system (Coinage act of 1792). A dollar must be one thing or another but not both. Define a dollar as X number grains of silver or X number grains of gold. Let the opposite metal float against the defined one based upon the market value for whatever weight. Otherwise you have to have CONgress constantly reevaluate the definitions and in the mean time while there arguing. Gresham's law causes one or the other metals to go into hiding or flee offshore.

Trust Guy
05-29-11, 12:15 PM
I’m a precious metal fan . I’m not certain specie is the best thing at this time , given the volume of notes v. metals at play . Our problem with folding money lies in who issues and regulates the value of that paper . There is no real regulation on value aside from market influence .

Now would be a good time to add this to the discussion , if you have not seen it . Quite an overview , drawing history into the symbolism .

The Secret of Oz (http://www.youtube.com/watch?v=swkq2E8mswI&feature=player_embedded#at=20) - 1:56:25

Winner : Silver Sierra Award at the Yosemite Film Festival in 2009 - Best Documentary of 2010, Benoit International Film Festival .

shikamaru
05-29-11, 01:30 PM
Really? If that's the case, why would Utah have to write a new law about it?

Do you have a cite?

How about several?

Source: Gold Bullion Coin Act of 1985 (http://en.wikipedia.org/wiki/Gold_Bullion_Coin_Act_of_1985)



Gold coins as legal tender

The case of Ling Su Fan v. United States, 218 U.S. 302 (1910), establishes the legal distinction of a coin bearing the "impress" of the sovereign:

“ These limitations are due to the fact that public law gives to such coinage a value which does not attach as a mere consequence of intrinsic value. Their quality as a legal tender is an attribute of law aside from their bullion value. They bear, therefore, the impress of sovereign power which fixes value and authorizes their use in exchange. ”

The case of Thompson v. Butler, 95 U.S. 694 (1877), establishes that the law makes no legal distinction between the values of coin and paper money used as legal tender:

“ A coin dollar is worth no more for the purposes of tender in payment of an ordinary debt than a note dollar. The law has not made the note a standard of value any more than coin. It is true that in the market, as an article of merchandise, one is of greater value than the other; but as money, that is to say, as a medium of exchange, the law knows no difference between them.


As far as public policy is concerned, there is no difference between a $50 gold buffalo coin and a $50 FRN.
The difference is in the market value of the metal itself rather than the value affixed to it by the sovereign (stamped or nominal value of the coin).
Perhaps we should review the concept of legal tender?

Source: http://www.law.cornell.edu/uscode/31/5118%28d%29.html



(b) The United States Government may not pay out any gold coin. A person lawfully holding United States coins and currency may present the coins and currency to the Secretary of the Treasury for exchange (dollar for dollar) for other United States coins and currency (other than gold and silver coins) that may be lawfully held. The Secretary shall make the exchange under regulations prescribed by the Secretary.

shikamaru
05-29-11, 01:41 PM
A Bimetalic standard is the fatal flaw to the old system (Coinage act of 1792). A dollar must be one thing or another but not both. Define a dollar as X number grains of silver or X number grains of gold. Let the opposite metal float against the defined one based upon the market value for whatever weight. Otherwise you have to have CONgress constantly reevaluate the definitions and in the mean time while there arguing. Gresham's law causes one or the other metals to go into hiding or flee offshore.

Fair enough.
Thank-you for that explanation.

shikamaru
05-29-11, 01:48 PM
I’m a precious metal fan . I’m not certain specie is the best thing at this time , given the volume of notes v. metals at play . Our problem with folding money lies in who issues and regulates the value of that paper . There is no real regulation on value aside from market influence .

Now would be a good time to add this to the discussion , if you have not seen it . Quite an overview , drawing history into the symbolism .

The Secret of Oz (http://www.youtube.com/watch?v=swkq2E8mswI&feature=player_embedded#at=20) - 1:56:25

Winner : Silver Sierra Award at the Yosemite Film Festival in 2009 - Best Documentary of 2010, Benoit International Film Festival .

Trust Guy, this video is fantastic.
Thank-you for this contribution.

Trust Guy
05-29-11, 06:45 PM
I’m wondering where this recent push is really coming from .

Article 1 - The Legislative Branch - Section 10 - Powers Prohibited of States - Clause 1

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.

States can not “coin Money” nor “make any Thing but gold and silver Coin a Tender in Payment of Debts” . Kind of a Catch 22 situation . Let’s look at a few original definitions , as understood at the time.

COIN, v.t. (http://1828.mshaffer.com/d/search/word,coin) -

1. To stamp a metal, and convert it into money; to mint.

MONEY, n. plu. moneys. (http://1828.mshaffer.com/d/search/word,money) -

1. Coin; stamped metal; any piece of metal, usually gold, silver or copper, stamped by public authority, and used as the medium of commerce. We sometimes give the name of money to other coined metals,and to any other material which rude nations use a medium of trade. But among modern commercial nations, gold, silver and copper are the only metals used for this purpose. * * *

So by definition Money is Coin .

TEND'ER, n (http://1828.mshaffer.com/d/search/word,Tender+) -

2. In law, an offer, either of money to pay a debt, or of service to be performed, in order to save a penalty or forfeiture which would be incurred by non-payment or non-performance; * * *

The States could only make Coin Payment for Debts . But who’s owed . I contend in this instance , only the State , and probably not it’s political subdivisions . A State has no authority to do such in matters between Private Parties .

Article 1 - The Legislative Branch - Section 8 - Powers of Congress - Clause 5

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

The Central Gove. has blatantly breached it’s Trust Duty in Coinage and regulating the Value , arrogated the Coinage to itself , and for a while even the metals , and abrogated the power to emit Bills of Credit as Currency through feign of Authority to a Private Monopoly .

Neither can the States print their own Currency as a circulating means of exchange .

“Bill of credit” is a phrase from Article One, Section 10, Clause One of the United States Constitution. It refers to a document similar to a banknote that is issued by a government and designed to circulate as money. Because the framers of the Constitution sought to limit the issuance of currency, it explicitly prohibits the states from issuing bills of credit. British colonies in North America would issue bills of credit in order to deal with financial crises, although doing so repeatedly would result in inflation. The documents would circulate as if they were currency, and colonial governments would accept them as payment for debts like taxes. They were not always considered legal tender for private debts.”

Emphasis mine : http://en.wikipedia.org/wiki/Bill_of_credit

So , how do we peacefully get this matter resolved ?

shikamaru
05-29-11, 07:26 PM
Legal tender means that it is binding on the CREDITOR, not the DEBTOR, to accept the offer of currency of the realm.

You can negotiate with private individuals in beaver skins if it suits your fancy.

osbogosley
06-26-11, 11:45 AM
Listening to Howard Griswold from last night and he said gold and silver were declared to be commodities. Does that change things?

shikamaru
06-26-11, 04:49 PM
Listening to Howard Griswold from last night and he said gold and silver were declared to be commodities. Does that change things?

A sovereign or quasi-sovereign can declare gold and silver fluffy pink bunnies. That won't stop the rules and laws of nature and supply and demand from working.

Gold and silver are commodities regardless of who may decree whatever. This refers to industrial or commercial usages of gold and silver (aside from these possibly being a medium of exchange.

When the decrees don't work, expect restrictions or confiscations to occur. Restrictions and confiscations are attempts at price control ....

Gresham's Law can be quite unforgiving ....