Friday, April 15, 2011

Utah's Gold-Standard Law May Set Precedent

As reported by ABC News, the Utah law has now made it possible to buy and sell using gold. U.S. Eagles are now recognized as legal tender in the state. As of now, more than twelve other state legislatures are considering similar bills. It's expected that at least one will follow Utah's example.

There's also momentum building for a federal gold standard.
It doesn't literally mean people would pull out gold coins at the cash register. Instead, the Federal Reserve would be required by law to make their notes redeemable for gold and hold gold coins and bullion as reserves. The printing of U.S. dollars would also be weighed against the value of gold.

The last time the gold standard was seriously considered was during President Ronald Reagan's administration. Reagan appointed a commission in 1981 to study the role of gold in the U.S. monetary system, but the group mostly came out against it -- except for two members, including now-Rep. Ron Paul, R-Texas, a champion of the Tea Party movement.

Despite continued calls by proponents like Paul to consider the gold standard, it had mostly stayed under the radar, until now.

The Tea Party's growing momentum and rising inflation is giving new life to the issue, as evident in Utah....
Other, more mainstream, figures have some nice things to say about the gold standard. The '08 crisis, which brought the spectre of another Great Depression even though the monetary systems of the world are pure fiat, has helped relegitimize the gold standard. Skeptics point to what they consider the drawback of the system, which proponents consider a virtue: discretionary power to change the money supply would be taken out of the hands of the Federal Reserve. Some commenters have reservations about the U.S. going it alone, saying that it would lead to an untoward rise in the greenback. They believe that the U.S. has to be one of several nations to restore the gold standard before it could be made to work.

Yes, the gold standard is an idea whose time has come. If you want information on it, this Website is a good resource. [Disclosure: they excerpted two of my own articles on the subject.]

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