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Arizona To Propose Gold And Silver As Legal Tender This Week
History shows that, if individuals have the freedom to choose what to use as money, they will likely opt for gold or silver.
Of
course, modern politicians and their Keynesian enablers despise the
gold or silver standard. This is because linking a currency to a
precious metal limits the ability of central banks to finance the growth
of the welfare-warfare state via the inflation tax. This forces
politicians to finance big government much more with direct means of
taxation.
Despite the hostility toward gold from modern
politicians, gold played a role in US monetary policy for sixty years
after the creation of the Federal Reserve. Then, in 1971, as concerns
over the US government’s increasing deficits led many foreign
governments to convert their holdings of US dollars to gold, President
Nixon closed the gold window, creating America’s first purely fiat
currency.
America’s 46-year experiment in fiat currency has
gone exactly as followers of the Austrian school predicted: a continuing
decline in the dollar’s purchasing power accompanied by a decline in
the standard of living of middle- and working-class Americans, a series
of Federal Reserve-created booms followed by increasingly severe busts,
and an explosive growth in government spending. Federal Reserve policies
are also behind much of the increase in income inequality.
Since the 2008 Fed-created economic meltdown, more Americans have become
aware of the Federal Reserve's responsibility for America's economic
problems. This growing anti-Fed sentiment is one of the key factors
behind the liberty movement’s growth and represents the most serious
challenge to the Fed's legitimacy in its history. This movement has made
“Audit the Fed” into a major national issue that is now closer than
ever to being signed into law.
Audit the Fed is not the only
focus of the growing anti-Fed movement. For example, this Wednesday the
Arizona Senate Finance and Rules Committees will consider legislation
(HB 2014) officially defining gold, silver, and other precious metals as
legal tender. The bill also exempts transactions in precious metals
from state capital gains taxes, thus ensuring that people are not
punished by the taxman for rejecting Federal Reserve notes in favor of
gold or silver. Since inflation increases the value of precious metals,
these taxes give the government one more way to profit from the Federal
Reserve’s currency debasement.
HB 2014 is a very important and
timely piece of legislation. The Federal Reserve’s failure to reignite
the economy with record-low interest rates since the last crash is a
sign that we may soon see the dollar’s collapse. It is therefore
imperative that the law protect people’s right to use alternatives to
what may soon be virtually worthless Federal Reserve notes.
Passage of HB 2014 would also send a message to Congress and the Trump
administration that the anti-Fed movement is growing in influence. Thus,
passage of this bill will not just strengthen movements in other states
to pass similar legislation; it will also help build support for the
Audit the Fed bill and legislation repealing federal legal tender laws.
This Wednesday I will be in Arizona to help rally support for HB 2014,
speaking on behalf of the bill before the Arizona Senate Finance
Committee at 9:00 a.m. I will also be speaking at a rally at noon at the
Arizona state capitol. I hope every supporter of sound money in the
Phoenix area joins me to show their support for ending the Fed’s money
monopoly.
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