We were intrigued that the
San Jose Mercury News, of all papers, chose to report this story: the state of Utah has passed a law to legalize the use of
gold and silver coins as currency. The law will also exempt the sale of such coins from state and local sales taxes. Already the new law is drawing entrepreneurs: Craig Franco, who owns the Utah Gold and Silver Repository, hopes to make money by allowing people to store their precious metals in a vault and issuing debit cards that allow account holders to draw against their reserves. The states of Minnesota, North Carolina, and Idaho, as well as nine others, are exploring similar laws. We're going to go out on a limb and guess that California isn't one of them.
This is certainly an interesting development. Of course, given the
mercy the federal government showed to Bernard von Nothaus, we'll wait and see whether the Federal Reserve and its allies in DC are really willing to tolerate competing currencies in the US. But we're very curious about growing skepticism towards the Fed's monetary policy, and the growing acceptance of alternatives to the use of green paper as money.
Good question for California is whether IOUs could ever become a competing currency.
ReplyDeleteYou might have identified something even less scarce and more prone to inflation than the dollar. Certainly debasing its own credibility is a core function of California government.
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