Dollar collapse may be imminent as states look to use gold, silver as currency

The state of Arizona is concerned about the decline of the United States economy and the value of the U.S. dollar that is being debased by the Federal Reserve System. With S.B. 1439, state senators voted in favor of making gold and silver coins legal tender in Arizona.

According to lawmakers, the state legislation would make gold and silver legal currency and not be subjected to tax or regulations as property. The bill would allow consumers in Arizona to use the precious metals as money but only if businesses accept them. If passed, it would go into effect next year.

The bill advanced four to three by a House committee and the Republican-led senate voted 17 to 11 in support of the initiative. It has also been sponsored and co-sponsored by a total of 12 GOP state officials.

Many say that the measure is a shot against the federal government and suggests a growing mistrust in government-backed money, otherwise known as fiat currency, a form of money that is not backed by anything tangible.

Although Democrats oppose the piece of legislation, proponents argue that it is an acceptable framework that would protect the state if the U.S. dollar became so inflated that it would lose all of its value.

“The public sees the value in it,” said Maricopa Republican State Representative Steve Smith, reports the Associated Press. “This is the type of currency we have had over the history of mankind.”

Green Valley Democratic State Rep. Rosanna Gabaldon argued that “this should be addressed by the Federal Reserve and not by the state.”

The Copper State isn’t the first state to try to have money backed by gold and silver. In 2011, Utah implemented its own proto-Gold Standard. This would permit state consumers to utilize gold and silver coins to purchase goods and services.

Other states have debated installing similar laws, especially since the economic collapse that took place in 2007/2008. Minnesota, North Carolina, Idaho, South Carolina, Colorado and other states have all consisted of legislators wary of the U.S. dollar.

Those who make the case for bullion as legal tender say that paper money is prone to abuse by the government and central banks. When central banks inflate the money supply, which is what is transpiring all around the world, then it hurts the purchasing power for average Americans and consumers in general.

“The gold standard would keep you from printing money and destroying the middle class,” said retired Texas Republican Congressman and three-time presidential candidate Ron Paul in 2011. “Every country where you have runaway inflation, there’s no middle class. Mexico, there’s no middle class; you have a huge poor class, and a lot of wealthy people. Today we have a growing poor class, and we have more billionaires than ever before. So we’re moving into third world status.”

In 1971, U.S. President Richard Nixon took the country off of the Gold Standard and imposed a system that the nation copes with today. Since then, the U.S. has faced an enormous growth in the size of the federal government, astronomical debts and deficits, an increase in prices in everything from food to healthcare to oil and an eroding middle class.

Furthermore, since the inception of the Federal Reserve in 1913, the U.S. dollar has lost 90 percent of its value. In recent years, the monetary initiatives from Fed Chairman Ben Bernanke, like quantitative easing, have further devalued the greenback.

Americans have been acquiring gold and silver bullion at record levels for quite some time now. Global Gold News has reported on how the U.S. and Canadian Mints have had to limit or suspend sales of silver because of strong demands by investors.

In the morning trading session, gold was down $3.70 and was trading at $1,607. Silver was also down $0.02 and stands at $28.81.

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