Thursday, March 24, 2011

Utah Remonetization Bill Rebuke To Federal Reserve

The bill remonetizing gold and silver is still being reviewed by Utah's governor, but it has passed both the House and Senate by healthy margins. It may survive a veto. Once it becomes law, Utahans will be able to use U.S. Eagles as money in shops. Since the bill is in conformance with a strict reading of the U.S. Constitution, no foreign gold bullion coins will be authorized as money. As an article in the Globe and Mail explains, this bill is a rebuke to the Fed.
“They’ve been a disaster,” says Jeff Bell, policy director of the American Principles Project, a conservative lobby group that has helped the Utah legislators and favours a return to the gold standard. “Mr [Ben] Bernanke, ever since he got on to the Fed, has been a force for fighting deflation and bringing interest rates down to the disappearing point.”...

The Fed is unpopular with the US public, and several other states have recently been considering – with varying degrees of seriousness – similar legislation to Utah’s.

From 2003 to 2009 the percentage of people saying the Fed does a “good” or “excellent” job fell from 53 to 30 per cent, according to Gallup. A Bloomberg opinion poll last year found that 16 per cent of Americans want to abolish the central bank outright – although it did ask a leading question.
The Fed's unpopularity may not matter, because it's designed to be an independent institution that takes the political fallout for bad economic times.

Thus, Congress will be reluctant to end the Fed even if a majority of voters approve abolition. Still, point man Ron Paul shouldn't be counted out: he's been continually underestimated, and has turned into quite the folk hero. He may have the clout someday.

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