December 30th, 2010

The Utah Sound Money Act


photo credit: Corey Holmes

In 1980, Zimbabwe became a sovereign African nation, gaining its independence from the United Kingdom. At that time, their dollar was valued at a higher rate than the U.S. dollar, at a rate of 1 to 1.25. Earlier this decade, President Mugabe—in power since 1987—began to fulfill a long-standing campaign promise to equalize land ownership, through a campaign called Fast Track Land Reform. While white Zimbabweans constituted less than 1% of the population, they owned around 70% of the land. In 2000, Mugabe began to seize and redistribute land owned by whites to black Zimbabweans.

The economy quickly tanked in response to these moves, as well as the resulting sanctions imposed by several Western nations. That year it declined by five percent, then by eight percent in 2001, then twelve percent in 2002. Inflation quickly surpassed normal percentages and increased into the tens, then hundreds, then thousands, and then like an asymptote, skyrocketed towards infinity. At its highest rate, Zimbabwe’s inflation reached a monthly high of nearly 80 billion percent.

I carry in my wallet one of the most potent objects that can be used in teaching others the nature and importance of sound money: a 100 Trillion Zimbabwe Dollar note—the highest amount ever printed. (Get your own!)

In the months prior to the collapse of their currency, Zimbabweans began using foreign currencies as a more stable medium of exchange. The government was quickly forced to legalize such alternative currencies, first licensing hundreds of businesses to sell their wares in foreign currency, and later suspending their currency altogether, legalizing the foreign currencies themselves for use in the country. Gold has become a coveted commodity as individuals look for a more reliable currency with which to engage in commerce.

Zimbabwe is just the latest of a long string of failed fiat currencies. A currency need not undergo hyperinflation, however, to be rendered worthless. Since its inception in 1913, the Federal Reserve Note (“U.S. Dollar”) has lost 96% of its value through a steady (and sinisterly mis-reported) inflation.

As with Zimbabwe, countries with central banks seek to enforce their monopoly on creation (counterfeiting) of the official currency through legal tender laws. In other words, alternative currencies are outlawed as a medium of payment; the legalization of competing currencies would, through the open market, result in the government losing its monopoly and ending up with a “continental”-like pile of paper with little to no value. (So concerned were the early leaders of the United States with this issue [they had learned from personal experience] that the U.S. Coinage Act of 1792 instituted the death penalty for anybody found counterfeiting the currency.)

Whether hyperinflation is in the future for the Federal Reserve Note or not, its eventual demise is near certain. Positioning ourselves through preparation and wise financial management to proactively respond to such events on the horizon is wise counsel—should not the same apply to our government?

Last year, Rep. Ron Paul (R-TX) introduced the Free Competition in Currency Act which would, in his words, “allow[] for competing currencies [which would] allow market participants to choose a currency that suits their needs, rather than the needs of the government.” Gold, silver, or any other form of currency would be acceptable, under this proposal, for engaging in commerce.

While we wait for the federal government to do nothing to stem the tide of Federal Reserve Notes that will likely soon capsize our ship of state, states can, like individuals, position themselves to proactively prepare for any problem with the dollar, rather than later be forced to react under troublesome circumstances. Article I Section 10 of the U.S. Constitution says that “No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts…” Additionally, no power was delegated in the Constitution to allow for the federal government to make anything but gold and silver coin a legal tender for commerce. That this limitation has long been ignored is no excuse for its ongoing abuse.

In the 2011 general legislative session, Utahns will have an opportunity to position themselves and their state on better financial footing by infusing the system with sound money—to the degree that willing participants choose to use either gold or silver as alternative currencies. The Utah Sound Money Act will soon be introduced to initiate this opportunity.

This bill is designed to reinstate gold and silver coin as an optional medium of exchange for use in commerce within the state of Utah. It nullifies legal tender laws for intrastate commerce, recognizing the inherent, inalienable right of individuals to engage in specie-based exchanges with each other on mutually agreeable terms. You can read the bill here (PDF).

The bill goes further. Among other things, it:

  • exempts gold and silver from sales and capital gains tax when used in intrastate commerce;
  • provides standing for Utah court declaratory relief from intrusive federal regulation;
  • outlaws searches and seizures, as well as disclosure, of gold and silver coin without a lawful warrant from the county sheriff;
  • makes use of the long-defunct Utah State Defense Force to store, safeguard, protect, and transport Utah’s specie holdings;
  • allows any Utah taxpayer to discharge his/her financial obligations to the state government in gold or silver coin, should they so choose;
  • establishes cooperatives (LLCs) to facilitate and promote intrastate commerce using gold and silver coin; and
  • allows for this increase in liberty at no direct nor initial cost to the state of Utah.

This bill does nothing to the federal government’s use of Federal Reserve Notes and monopoly over creating that fiat currency. This bill does not impose a gold standard, nor remove the dollar as a legal tender to be used in commerce. This bill does not do anything, really, other than increase the liberty of each individual to determine how they would like to engage in commerce, and with what currency.

On what rational grounds can an idea like this be opposed?

This is not to say that the language or implementation of the bill is perfect. I’ve had the opportunity to review the draft for several weeks and offer input to the author, and I have to say, the bill is fairly solid. Nonetheless, improvements may yet be suggested and incorporated—and that would be a good thing. But considering the state of the dollar, the liberty-suppressing imposition of legal tender laws, and the stranglehold over commerce (interstate or otherwise), this idea is one whose time is come.

Ayn Rand’s quote on gold speaks many truths about our current situation:

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims.

This bill seeks to impose a protecting shield around those who wish to voluntarily engage in commerce under its provisions by defending against the destroyers whose counterfeiting operations oppose any competition. For the sake of our liberty—even if you have no desire to use gold or silver—this bill should be supported by all Utahns who have the remotest of concerns about preserving our wealth and staving off financial ruin.

19 Responses to “The Utah Sound Money Act”

  1. Mark Herpel
    December 30, 2010 at 1:52 pm #

    Excellent article the Utah act should be watched very closely, I hope for the best. With passage, I’ll be moving to Salt Lake City.

  2. rmwarnick
    December 30, 2010 at 2:12 pm #

    The gold standard bill is crazy and unconstitutional, but that’s normal for our far-right state legislature.

    However, in at least some countries people are free to have bank accounts in foreign currency. That might address your concerns, but it would take an act of Congress.

  3. Ronald D. Hunt
    December 30, 2010 at 2:24 pm #

    “Whether hyperinflation is in the future for the Federal Reserve Note or not, its eventual demise is near certain.”

    All the loons screaming about the dollar heading into inflation right now are either idiots or intellectually bankrupt. The number of dollars is circulation is decreasing very rapidly at the moment. This is a result of banks reducing their lending to lower leverage ratio’s, which means they are reducing the amount of money they have borrowed via the federal reserve discount window. Money returned to the fed this way is not redistributed back into the economy it is destroyed.

    This in fact will have a huge deflationary effect, combined with the middle class debt load, and the reduced lending capacity forcing businesses to take on more of the risk in their supply chains and product distribution which causes prices to rise or basically an inflationary effect. I like to call these combined forces “Stretch-flation” as the deflationary part of the effect stops wage growth and increases the cost of loans, and the inflationary effect increases prices reducing the buying power of wages lowering the economies demand capacity.

    Gold in the current situation is a really stupid investment, their are several major things to understand when looking at this particular soft metal. The amount of “paper” gold aka gold derivatives out their is likely around 4-5 times the actual amount of gold actually in existence on the earth, deflation will start to eat into the value of gold which will likely cause a sell off, And the value of gold currently is hyper inflated so their will be a big correction in its value when the time comes.

    Right now would be a good time to dump gold assets. Tying our currency to gold would truly be stupid as our currency would go through the same wild swings in value that your soft metal commodity goes through creating enormous amounts of uncertainty, basically it would be a giant drag on the economy as the buying power of the economy would be dependent of the perceived value and biases of gold.

    What we need is currency reform that will provide for more transparency, reduce the power of the central bank to engage in favoritism, end debt as money, and end the fractional reserve system.

  4. Jim Davis
    December 30, 2010 at 3:04 pm #

    Ronald, I’m glad your predictions of deflation will be forever posted on this blog. When inflation builds more momentum, further destroying the value of the dollar, we will look back to your comment and remember-Ronald D. Hunt was wrong, very wrong.

  5. Connor
    December 30, 2010 at 3:06 pm #

    rmwarnick,

    How is the bill “crazy” and unconstitutional? I realize that your commenting style on this blog is often like a drive-by shooting, quickly throwing out accusations and name-calling, but if you’d provide some substance to which others can respond, that’d be great.

    Ronald,

    Your assertion that I’m “screaming” about the dollar heading into inflation indicates that you didn’t read the post. I’m not saying we’ll have hyperinflation tomorrow; I am saying that the dollar’s history clearly shows a long trend of inflation. To ignore this is to be guilty of what you called “intellectual bankruptcy”.

    Nor have I suggested gold as an investment. This bill also does not “tie our currency to gold”. While I disagree with you on several of your points, most of them are irrelevant to this issue, as the bill does not accomplish what you apparently fear it does.

    I suggest reading it.

  6. cgb
    December 30, 2010 at 3:56 pm #

    Here you go again, Connor. Leading off your post with a scare story about Robert Mugabe . . . and expressing surprise when your readers suggest you’re “screaming about hyperinflation”?

    I read the proposed act, and to be honest, I don’t really get it. You’re right that it doesn’t return us to the gold standard (it’s obvious that Utah couldn’t do that anyway). As near as I can tell, it simply allows people to pay the government (or demand to be paid by the government) in gold and silver. The overriding question I have after reading the act is “why”? It seems mainly like a Ron Paul style let’s-collectively-thumb-our-noses-at-the-Federal-Reserve bill. Haven’t we seen enough of those lately?

  7. Ronald D. Hunt
    December 30, 2010 at 4:10 pm #

    “Your assertion that I’m “screaming” about the dollar heading into inflation “

    I never suggested you where, your article is built around a story of inflation, a sort of reflection of past situations as a tool to predict possible future situations. You reference failed paper currencies and don’t mention any of the many failed commodity currencies as tho one was any different then the other, both are based on the idea of trust in the currency’s future value. both illusions ignore that currency is not an investment it is a means of exchange.

    “I am saying that the dollar’s history clearly shows a long trend of inflation.”

    A moderate amount of inflation is a good thing generally, somewhere between 0.5% and 1.5%, this has the effect of encouraging investment into the real economy, by making sitting on dollars a losing proposition.

    “Nor have I suggested gold as an investment. “

    Correct you didn’t, the bill did. The state accepting gold and silver as payment would surely lead to the state owning a sizable chunk of gold and silver, all of which would be subject to the whims and beliefs of those participating in that market or outright manipulating said market.

    Jim Davis,

    It relates to how the fractional reserve system works. You deposit a dollar into your savings account, the bank then uses it as backing for a loan from the central bank via the Fed discount window. Your $1 turns into $35-$40, which the bank then uses for consumer lending, other investments, derivatives, etc.

    What has happened is that via the Fed discount window around $220 Trillion dollars worth of credit has been issued, a rather giant chunk of that into mortgage loans. Well the mortgage loans went bust, when the returns on those loans went south the leverage ratio’s of the banks started to rise as savings was withdrawn from them during the economic downturn. So the banks have responded by reducing new lending in order to use as much revenue from existing loans to pay depositors while reducing their leverage ratio by paying back borrowed money from the Fed discount window.

    As the total number of “credit dollars” decreases via the Fed discount window the value of the dollar will rise not sink. Now QE2 will offset this a bit, not enough to change the outcome, as I suspect that the number of “credit dollars” will drop by where in the range of 10%-20% or around $25-$45 trillion dollars and QE2 is only about $900 billion dollars.

  8. rmwarnick
    December 30, 2010 at 4:41 pm #

    I do my blogging on One Utah, but it’s bad form to comment by posting links to another blog. Short version:

    This bill is crazy because it’s neo-Hooverism. In the 1930s, the United States was one of the last major nations to abandon the gold standard, and this failure to act was one of the principal causes of the Great Depression. Also, setting up a Utah version of Fort Knox to be guarded by the Utah Defense Force is insane.

    It’s unconstitutional because the Contract Clause (Article 1, Section 10) of the Constitution prohibits states from creating their own monetary systems.

  9. Clifton Brown
    December 31, 2010 at 2:31 am #

    Some of the very thoughts I had while reading this article have already been expressed pretty well. (rmwarnick phrased it perfectly when he referred to it as “neo-Hooverism”.)

    Truly it astounds me to hear people speak of hyperinflation when there is not a scintilla of evidence to support this concern. Interest rates are at historically low levels – why no mention of that?

    Connor, you have written about the devastating effects of hyperinflation in Zimbabwe, perhaps you would care to write about the effects of deflation on an economy? (I seem to recall Ben Bernanke making the comment one time that he would sooner throw money out of helicopters than to ever see deflation return – funny thought.)

    Allow me to finish it out by giving an investment tip here…

    With the demand out there for “hard” currencies, and with gold and silver already being so inflated in value, wampum beads are set to skyrocket in value. If your interested, call 1-800-wampum1 where I will sell you wampum beads that are marked up about 500% or so – but don’t worry, wampum’s value is going to go up so fast that you won’t even notice how bad I’m screwing you. Be sure and watch my advertisement next week on the Glenn Beck program. (I had to pay him quite a bit of money to be my wampum spokesman – and he insisted on being paid in dollars rather that wampum! Imagine that!)

  10. Connor
    December 31, 2010 at 12:45 pm #

    cgb,

    Here you go again, Connor. Leading off your post with a scare story about Robert Mugabe . . . and expressing surprise when your readers suggest you’re “screaming about hyperinflation”?

    That certain readers fail to see plain connections I’m making—sans screaming—is their fault, not mine. The dollar’s future is ultimately uncertain, like anything, but the Fed’s recent actions make clear that the dollar’s demise is increasingly likely.

    As near as I can tell, it simply allows people to pay the government (or demand to be paid by the government) in gold and silver. The overriding question I have after reading the act is “why”?

    This bill, at its core, secures to each individual the inherent liberty of paying another party (including their government) in a more reliable currency. It therefore encourages the use of sound money and provides security for holding such specie against confiscation, taxation, etc.—all things that have very recently been done by the federal government to ward off competition.

    Ronald,

    You reference failed paper currencies and don’t mention any of the many failed commodity currencies as tho one was any different then the other, both are based on the idea of trust in the currency’s future value. both illusions ignore that currency is not an investment it is a means of exchange.

    And nowhere in my article did I mention or suggest that gold or silver should be an investment. I don’t think it is at all.

    Still, there are plenty of factors that make gold and silver far more stable commodity currencies, backed by extremely long historical precedent. For details on this, I suggest this book.

    A moderate amount of inflation is a good thing generally…

    Says you. And I might perhaps agree, so long as said inflation was the result of market forces, and not central planning.

    The state accepting gold and silver as payment would surely lead to the state owning a sizable chunk of gold and silver, all of which would be subject to the whims and beliefs of those participating in that market or outright manipulating said market.

    Right, because sticking to a currency whose value has totally tanked is a better idea.

    rmwarnick,

    This bill is crazy because it’s neo-Hooverism. In the 1930s, the United States was one of the last major nations to abandon the gold standard, and this failure to act was one of the principal causes of the Great Depression.

    Wow. You could not be more wrong. Read here for starters. In short, the depression was caused not by the gold standard or anything related to it, but the expansion of the money supply by the Fed. Same as today.

    Also, setting up a Utah version of Fort Knox to be guarded by the Utah Defense Force is insane.

    “Insane”… You bandy it around as much as others do “extremism”, all casually tossed around in an attempt to avoid intelligent conversation and substantive rebuttals.

    It’s unconstitutional because the Contract Clause (Article 1, Section 10) of the Constitution prohibits states from creating their own monetary systems.

    Had you actually read the bill, you’d know that Utah would not be creating its own monetary system.

    Clifton,

    Truly it astounds me to hear people speak of hyperinflation when there is not a scintilla of evidence to support this concern. Interest rates are at historically low levels – why no mention of that?

    Perhaps because the artificially-set, government-controlled, Fed-induced low interest rates are a primary source of inflation. As Rothbard wrote:

    As early as 1915 and 1916, various Board Governors had urged banks to discount from the Federal Reserve and extend credit, and Comptroller John Skelton Williams urged farmers to borrow and hold their crops for a higher price. This policy was continued in full force after the war. The inflation of the 1920s began, in fact, with an announcement by the Federal Reserve Board (FRB) in July, 1921, that it would extend further credits for harvesting and marketing in whatever amounts were legitimately required. And, beginning in 1921, Secretary of Treasury Andrew Mellon was privately urging the Fed that business be stimulated, and discount rates reduced; the records indicate that his advice was heeded to the full. Governor James, of the FRB, declared to his colleagues in 1926 that the “very purpose” of the Federal Reserve System “was to be of service to the agriculture, industry and commerce of the nation,” and no one was apparently disposed to contradict him. Also in 1926, Dr. Oliver M.W. Sprague, economist and influential advisor to the Federal Reserve System, prophesied no immediate advances in the rediscount rate, because business had naturally been assuming since 1921 that plenty of Federal Reserve credit would always be available. Business, of course, could not be let down.23 The Federal Reserve’s very weak discount policy in 1928 and 1929 was caused by its fear that a higher interest rate would no longer “accommodate” business sufficiently.

    An inflationary, low-discount-rate policy was a prominent and important feature of the Harding and Coolidge administrations. Even before taking office, President Harding had urged reduction of interest rates, and he repeatedly announced his intention of reducing discount rates after he became President. And President Coolidge, in a famous pre-election speech on October 22, 1924, declared that “It has been the policy of this administration to reduce discount rates,” and promised to keep them low. Both Presidents appointed FRB members who favored this policy.

    Connor, you have written about the devastating effects of hyperinflation in Zimbabwe, perhaps you would care to write about the effects of deflation on an economy?

    My concern is more about the government’s monopolistic control of the currency than it is for inflation versus deflation. I’d prefer to let the market handle the currency, whether it goes up or down.

  11. Ronald D. Hunt
    December 31, 2010 at 5:38 pm #

    “And nowhere in my article did I mention or suggest that gold or silver should be an investment.”

    Yes I am afraid you did, not directly mind you. By promoting a currency based on your soft metal of choice means that you want all of your current cash holdings or cash equivalent holdings value to be dependent on the current at the moment price of said soft metal. That makes your current cash holdings or cash equivalent holdings an investment in said soft metal.

    Money is supposed to be a means of exchange not an investment. Their is nothing stopping anyone from purchasing soft metals with their money and obtaining this “inflation safe” asset, never mind all of its market speculation problems.

    “Still, there are plenty of factors that make gold and silver far more stable commodity currencies, backed by extremely long historical precedent. For details on this, I suggest this book.”

    Your kidding me?, you want me to take advise from a Nazi supporter who bases many of his economic theories on the differences in intellectual capacity of different races.

    Ludwid Von Mises, is an intellectually bankrupt racist.

    I will also say that going back to these guys from the 1920′s or earlier ignores many advances in understanding we have obtained sense. Things like reflexivity theory, macro economics etc.

    “Wow. You could not be more wrong. Read here for starters. In short, the depression was caused not by the gold standard or anything related to it, but the expansion of the money supply by the Fed. Same as today.”

    The great depression was caused by the unregulated excesses in the financial markets from buy on margin speculation that bid things far beyond their real value. When the bubble popped and the ensuing sell off lead to margin calls that couldn’t be made which lead to more sell offs creating the cycle that dumped the markets. By the time they started the printing presses that events that created the great depression had already passed and the market adjustment could not be avoided.

    This situation was made worse by 1 European nation after another ending their gold currencies to devalue their currency and make their exports cheaper on the global market in a vain attempt to prevent widespread unemployment in their respective nations.

    Really more then anything else the great depression was caused by an over concentration of wealth that over the years before the depression had eaten into the real purchasing power of the poor and middle classes of world, leaving a situation where demand was unable to meet available supply. Remembering that demand is feed by the wages of the poor and middle class seems to be a lesson that we have forgotten, especially the supply side theory nuts.

  12. Clifton Brown
    January 1, 2011 at 4:52 pm #

    Ronald,

    I’m no fan of Von Mises myself – however, in the interest of intellectual honesty, I feel to point out that calling him a Nazi supporter is just plain wrong. In fact, the opposite was true.

    Connor,

    I find the libertarian position to be completely untenable. The libertarian love for the gold standard has far more to do with philosophy (government is ALWAYS the problem and NEVER the solution) than it has to do with any sort of sound economic policy or evidence.

    Von Mises, Ayn Rand, et. al are far more concerned with how the world *SHOULD* work rather than how it actually *DOES* work.

    Sorry Connor, but monopolies exist in unregulated free markets and externalities are real things and libertarians live in this little fantasy land where they have completely rationalized these inconvenient facts out of existence.

    There are HUGE problems with the gold standard that any student of economic history understands very well. As much as I admire Ron Paul’s anti-war stance, I could never support him due to his reckless stance on monetary policy.

    Being unable to expand money supply is a recipe for deflation. Deflationary spirals cause people to hoard money and therefore becomes an anchor on economic growth. We have been through all of this before. There shouldn’t be any debate on this – and yet there is.

    While the gold standard does produce long-term price stablity, what is rarely mentioned is the short-term prices are anything but stable. In the United States from 1879 to 1913 the coefficient of variation of the annual change in price levels was 17.0, whereas from 1943 to 1990 it was only 0.88. Such uncertainty in price levels (what the gold standard is supposed to cure) also serves as an anchor on economic growth.

    The gold standard did nothing to prevent recessions. On the contrary, they were more common and more severe during the years of the gold standard.

    As I said before, such arguments are based more in anti-government philosophy than it is in research or reality. I don’t want to hear 19th century solutions for how to manage a 21st century economy.

  13. Ronald D. Hunt
    January 1, 2011 at 6:54 pm #

    You sure about that?, When I looked him up the number of links to stormfront a white supremacist/neo fascist website that sings his praises was astounding.

  14. Clifton Brown
    January 2, 2011 at 3:52 pm #

    I’m not too surprised by the fact that neo-Nazis admire Von Mises. They are, afterall, extreme right-wingers. However, the admiration would not be mutual.

    Von Mises, while not religious, was ethnically a Jew. And the real Nazis (as opposed to the modern-day wannabes) were not believers in unregulated free markets. On the contrary, the Nazis were all about maintaining tight controls on economic output.

    Von Mises could see the writing on the wall and emigrated to the United States in 1940.

  15. Michaela Stephens
    January 5, 2011 at 1:57 pm #

    One question I have in relation to this is what the comparison is between the amount of gold specie on the planet and the number of dollars. Considering the market price of gold right now, how do these amounts compare? Also, I wonder who owns gold right now. I also wonder how the gold-haves compare to the dollar-haves. Are there more of them or less? Is it just me or does it seem like gold investors want their investments to be considered a currency rather than an investment that can be taxed the way investments are? I suppose if I were a gold investor who watched my investment soar in value, I would be reluctant to have it taxed if I cashed out..

  16. Taylor
    January 6, 2011 at 9:45 pm #

    Connor,

    Good observations. However, the reason this bill won’t change anything is because in a free market, if one medium of legal exchange is perceived as more valuable than another, it will be hoarded, not circulated. Even if it was a legal option, would you pay your taxes in gold?

  17. Ronald D. Hunt
    January 6, 2011 at 10:34 pm #

    “One question I have in relation to this is what the comparison is between the amount of gold specie on the planet and the number of dollars. Considering the market price of gold right now, how do these amounts compare?”

    it’s insufficient to only compare money and gold in the modern market. One has to consider the derivatives market to gain a full understanding of what is going on here.

    The common derivative used in commodity markets such as gold is the futures contract. An example would be selling you 100 gold coins at today’s dollar value say $1000 dollars but with the agreement that the coins will be delivered in one year. It is basically a bet, I would be betting that the price will go down and you would be betting that the price would go up. In this contract the seller would not actually have the goods on hand he would buy them in one years time where he would either pocket the difference due to a lower price or lose an amount of money equal to the increase in value of that commodity.

    In the last 10 years gold derivatives have grown to a dollar amount 3-4 times the total amount of mined gold on earth. It is a wildly hyper inflated market, The next bubble could very well be gold, and if the dollar goes into deflation it most certainly will be.

  18. JJL9
    January 24, 2011 at 2:16 pm #

    You guys are clearly missing the point.

    You can take your sharp pencils and you can look at the last 10 years gold derivatives and you can look at past failed commodity currencies and you can decide to use whatever you want for your own currency.

    See how that works?

    You get what you want AND everybody else gets what they want. You seem to want to cling to the idea that you get what you want and everybody else gets what you want too.

    Why are you not happy to hold US Dollars while allowing others to choose not to?

    You don’t have to convince anyone that holding US Dollars is better than holding some other type of gold coins or whatever they might want to hold.

    Why the ceaseless , constant , incessant , never-ending , perpetual , unceasing , unremitting, uninterrupted drum beat to put the Federal government in charge of making decisions for us?

  19. O Layne
    February 15, 2011 at 7:27 am #

    @jjl9 I agree with you 120% You are spot on; if people want to use gold as a currency its there choice. If they want to use dollars also so be it. The great thing is that this allows for them to have a choice.

    The real problem is this and you can verify it. The derivatives and paper gold and silver system is under tremendous strains. They are short; and desperate to get out from under it.

    This will be one more nail in the coffin for bad bets for JPM and HSBC. They are currently being sued and the CFTC has just set limit positions to try and reign them in at 10%. JPM and HSBC have such large positions (40%) its impossible for them to get out from under them in the next few years even. They got a grandfather clause till they reach the position.

    They fear this law will further expose there positions as manipulation as the current lawsuits argue for.

    Though lost in the mist that is spewed on there; The state is giving people the Choice.

    That is the best for all and has very little down effect on the rest. I salute Utah for standing for Liberty and returning people the option of Choice.

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