Silver & Gold As Legal Tender

Here's a link to the article: http://www.washingtontimes.com/news...egal-tender/

Very interesting if you ask me. I'd have to wonder at what price point would they take the gold/silver? at spot? slightly under?

Seems like I recall reading about a foreign currency that changes with the price flux of gold, via the gold coins. Does that sound right?

That makes sense to me, instead of stamping 25 dollars on a pure gold coin an expecting it to always be worth that amount or the amount it may have been worth when coin was minted....

As far as the idea itself, seems like no brain-er to me. Gold an silver has worked for countless eons as many different country's circulated currency right, so why would it not work again?

The article says that, but I don't see anywhere in the legislation itself which Bryan linked to that says that.

Ity seems to me that they can't simply say "silver and gold coins will be legal tender for their bullion value". They'd have to specify exactly what that "bullion value" will be. Which will make the system unworkable in practice as the bullion value changes so often. The whole point of "legal tender" is giving things a fixed, government-certified value that people don't need to haggle over.


Three reasons I can think of.

1. Because there simply isn't enough of the stuff to go around anymore; since about 1940 the world population has grown faster than the rate of precious metal mining. You'd need to suddenly find lots more gold and silver to mine, and/or eliminate the "surplus population", to re-monetize precious metals to the same degree you saw pre-1940.

2. Because gold and silver are simply too bulky and heavy to shuffle around in large transactions. Back when coins were invented 2700 years ago, coins were a far more efficient means of payment than sheep, cows, iron bars and the other things that people used to use for "money". We've invented far more convenient forms of money since then; coins are seen by most people today as cumbersome and unwieldy. Why do you think there's such a furore over replacing the $1 note with a $1 coin?

3. Because governments can't control it. The problem with using rocks for money is that monetary policy would be primarily determined by how fast the miners can dig the stuff out of the ground. When a country with precious metal coinage has an economy that goes downhill, precious metal coins disappear, which means nobody has any money at all. And making circulating coinage out of precious metals will not prevent an economy from collapsing - Mexico proved that when they tried it in the early 1990s. For governments to control money properly, it has to be worthless for any other purpose other than as money.

The main hindrance to states issuing their own currency was and still is the Union Constitution, which explicitly prohibits them from doing so. In the Civil War period, once a state seceded from the Union, it no longer had to abide by the Union Constitution. They would have been free to issue coins and notes of their own, or to join another federation (the Confederacy) and use money issued by that nation.

Well Montana, New Hampshire, Georgia, South Carolina, Utah and Tennessee all have laws pending to bring the gold and silver standard back to their states.

Some differ think it is New Hampshire law even has previsions for banks to except it at face value and also be able to sell it.

Very interesting I think, to put it simple those that have it can use it.

I love the idea and think our country should go back to the gold standard that Richard Nixon took away in 1971 because he could not balance out budget with funding the Vietnam War I was in.

Bring it back then our government can't just keep printing our country away note by note.

Exactly what Krands do. I think they use London 2nd fix as face value.

Ignorance, mainly.

$1 million in paper $1 takes up almost exactly the same space as $1 million brass bucks. The metal is eight times heavier.

Three brass bucks weigh about the same as four quarters, and quarters are heavily used.

Paper $1 last 6-18 months, brass bucks at least 30 years.

Nixon made it legal for us to own gold in any form, and also released the GSA Morgans.

We went off the gold standard in 1933 or 34. Only other countries could buy gold from us.