Starting in May, Utah residents will be able to shop in a currency other than the dollar – gold, something that hasn’t happened since 1933.
Utah became the first U.S. state last month to recognize gold and silver coins minted by the federal government as legal tender. More than a dozen other states are considering similar measures, and are expected to follow Utah’s example. The move, proponents say, is caused by declining faith in the U.S. monetary system and concern about rising inflation.
The gold standard, a monetary system in which the dollar is valued against a certain weight of gold, lasted until the Great Depression, when the Federal Reserve confiscated gold held by the public. President Nixon abolished the conversion of dollars to gold at a fixed rate in 1971.
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.
Proponents of the system argue that implementing a gold standard in the United States would lower the risk of the continuing fiscal crisis. The move by Utah, they say, sends a message to the federal government that states have more fear and little confidence in the U.S. monetary system.
It also limits the role of the central government in directing monetary policy, and would take away some powers from the Federal Reserve, though proponents argue that’s the basic premise of the system.
But as the Tea Party, with its push to return to Constitutional values and cut spending, gains clout, and states consider bills like those in Utah, the issue is likely to once again find its way into the spotlight.
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