Friday, March 11, 2011

Utah Senate Approves Legal-Tender Bill

In a swift and solid vote, the Utah state legislature has approved the bill that takes the first step to recognizing gold and silver as legal tender in the state. The vote was 16-7, so the bill passes to the Utah governmor for his signature.
The measure would recognize as legal tender gold and silver coins issued by the federal government — not just their face value, but also their value in gold and silver or to a collector.

It would not require anyone to accept them, however, but make it an option. It also would exempt sales of such coins from capital gains tax. It also would order the state to study whether Utah should establish an alternative form of legal tender, such as one backed by silver and gold.

"It will put some pressure on the federal government. That’s the goal here because right now we have a dollar that’s just running away with inflation and our hope is that this is a little bit of a shock that’ll say we want to deal with inflation," Senate Majority Leader Scott Jenkins, R-Plain City, Senate sponsor of the bill, said in earlier debate. He gave senators gold chocolate coins on Thursday before debate....

Utah's governor has little incentive to veto a bill that has strong legislative support, so it's very likely that this bill will become Utah law. There's a chance that it may be repealed, most temptingly during a precious-metals bear market, but if the Utah legislature sticks through the thin years it'll be a historic law. As noted in the article, it's a wedge law that prefaces full monetization of gold and silver in the state.

Now, that would be historic.

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