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Friday, February 3, 2012

States Looking to Gold, Silver as New Currencies

With the Ben Bernanke and the Federal Reserve out of control, and Obama spending taxpayers money at unprecedented rates, a number of states are looking to silver and gold as options for a competing currency.

Utah has already implemented such a program in March 2011, now recognizing any gold and silver coin issued by a mint in the United States as legal tender.

The law includes a provision for the coins used in Utah to be viewed the same as the U.S. dollar, which means there is no capital gains tax on the metal coins.

As for the printing of paper money, that is forbidden by the Constitution in regard to states, although they do have the power to create "gold and silver Coin a Tender in Payment of Debts."

Interestingly, local communities are legally empowered to have their own paper currencies, with the caveat that they aren't confused with the look of the U.S. dollar.

Of course creating a paper currency without anything backing in is just as bad at any government level, as the Federal Reserve's assault on the U.S. dollar has proven. The dollar has dropped 95 percent value since the creation of the Fed.

How Utah is doing it via its Utah Gold & Silver Depository, is it's developing a systme which links gold or silver holdings of people to a debit card created for that purpose. So when they use the card, money is moved back and forth between accounts in private depositories created for that purpose. That's similar to how it's done now when countries sell gold, except on a much smaller basis.

At this time, 13 states have proposals to issue alternative currencies.

Ron Paul has sponsored a bill called the "Free Competition in Currency Act," which would give states power to create their own currencies.

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