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South Carolina Lawmaker Wants Separate Currency for State

AP 2/14/11

A South Carolina state politician wants the state to develop its own gold and silver-based currency in case the Federal Reserve collapses and hyper-inflation ensues.

 

"If folks lose faith in the dollar, we need to have some kind of backup," State Sen. Lee Bright told the Spartanburg Herald Journal's Stephen Largen. His bill asks a committee to look into the development of a state currency, citing the Constitution and Supreme Court precedents to prove the bill's legality.

 

Slate's Annie Lowrey tracks down similar bills in Georgia and Virginia, and points out that the legislation reflects a larger trend of state politicians wading into monetary policy. A bill in Georgia would require all debts to the state be paid in pre-1965 gold and silver coins. The Virginia proposal would let the state print its own money. Meanwhile, one politician in Utah wants to cut out the middleman entirely and allow the state's residents to run their very own mints.

 

Advocates of currency alternatives to the dollar argue that the Federal Reserve's quantitive easing techniques will lead to inflation. Texas GOP Rep. Ron Paul, who won the Conservative Political Action Committee's presidential candidate straw poll last week, has been Congress' most visible anti-Fed leader. Paul argues the Fed devalues the dollar, and proposes that the United States should gradually return to gold-backed currency.

 

In addition to the nightmarish logistical challenges involved with a state adopting a new currency, Lowrey points out that commodity-backed currencies can also experience volatility. For example, if a state collects income taxes in gold and then a big new gold mine is discovered, the metal's value would decline--together with the state's revenue holdings.

 

So for now, it's probably bests for individual consumers to refrain from shifting over to sovereign state currencies--especially since none of the recently introduced currency bills stands a strong chance of passing. However, for numistmatists looking to make a political statement, the Ron Paul silver dollar will likely appreciate--especially since federal authorities raided the libertarian minting operation that marketed it back in 2007.

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It's amazing to me anyone would think this is a good idea. I mean, what the hell does this guy think gives money its value? Just faith -- that's it. The fact that we know we can trade money for something we want is the reason it works. Period. And this yahoo thinks gold and silver have some magic, intrinsic value? WTF? He needs his head checked.

Posted
It's amazing to me anyone would think this is a good idea. I mean, what the hell does this guy think gives money its value? Just faith -- that's it. The fact that we know we can trade money for something we want is the reason it works. Period. And this yahoo thinks gold and silver have some magic, intrinsic value? WTF? He needs his head checked.

 

This is a great point. We should move to currency backed by liquor and smokes!

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