Someday, I would love to sit down and have a long conversation over coffee with Delegate Bob Marshall. There are times when he and I see eye to eye on issues, and then there are times when I really just have to question what he’s thinking. I can understand and even respect his stance on the gays in the military issue, even if I disagree wholeheartedly with it. But I just don’t see any good reason to propose that Virginia begin to mint its own currency – gold and silver coins – to foster “competition” with the Federal Reserve Bank.
There are a lot of adjectives that could categorize this proposal, and I will allow all of you to come up with a few. But, for charity’s sake, I will simply say that it’s unnecessary and a waste of time – both his and the General Assembly’s.
I’m not going to argue with Marshall regarding the law, because as far as my reading of his proposal, he’s not saying anything that’s inaccurate. Individuals can use any kind of currency they want to pay private debts as long as both sides agree. If you mow my yard and are willing to accept a six pack of beer in payment, that’s fine. And States may choose to require payment of their debts in any kind of coin or currency they want, as well. But that doesn’t mean its a good idea or one we should be pursuing.
In an environment where we are doing our best to cut and cut from the Commonwealth’s budget in order to ensure we don’t have to raise taxes to meet our obligations, I don’t know why anyone – especially a fiscal conservative – would propose any kind of plan like this that if implemented would require all kinds of new bureaucracy in Richmond. It’s not like we’ve got a Virginia Bureau of Engraving and Printing sitting around ready to strike gold and silver coins. All of that costs money, money we don’t have and money we can’t afford to waste duplicating things the federal government already does.
I’m well aware of the far right’s distrust of the Federal Reserve System. I think it’s paranoia writ large, to be frank, and the hyperinflation threat we may face won’t be ameliorated by Virginia issuing its own currency, even if it is based on precious metals. Why? Because no one is going to use it unless they are forced to. So unless Marshall also plans to force Virginians to pay their taxes in gold coins (which makes no sense – we want it to be easy to pay taxes, not harder) no one is going to use the currency. We can’t even get people to use dollar coins, and he thinks folks will use this? Besides, people aren’t paid in “Federal Reserve Note” paper currency anymore as it is. They’re paid electronically or via check, in dollars. Managing exchange rates from Dollars to whatever the Commonwealth would set up is a massive headache in and of itself. It would give banks another excuse to nickel and dime (pun intended) all of us, and it has the potential to turn the United States into Europe in the pre-Euro days. How is that a good thing?
If Marshall is concerned about the Federal Reserve System, that’s great – he can make reforming the Fed a central plank in his Senate campaign. But there’s no reason to fiddle with things at the state level. My mother used to tell me that the fact that you can do something doesn’t mean you should. The fact that Virginia has the authority to implement its own currency doesn’t mean we should. And, frankly, I don’t think it’s worth it to even waste the money studying the issue. Marshall’s proposal calls for a study that should cost “no more than $12,000.” That’s $12,000 that can be far better spent on something substantive. The fiscal conservative side of me really doesn’t appreciate wasting anyone’s tax dollars, even a sum as small (relatively) as $12,000.
With the number of real, legitimate issues facing the Commonwealth, from the current state of transportation to getting our economy going, I think it’s critical that our legislators keep their eyes on the ball and not try to find solutions for problems that don’t exist.
I agree with you here, but just one correction. You say, “And States may choose to require payment of their debts in any kind of coin or currency they want, as well.” That’s not the case.
Article I, sec. 10 says, “No state shall…make any Thing but gold and silver Coin a Tender in Payment of Debts….” That’s not really an issue here because the Delegate wants to use gold and silver. But that’s all that could be used.
Anyway, good article.
I have a hard time seeing anyone seriously entertaining this circus show. Bob Marshall is rapidly becoming an embarrassment.
I don’t see how this would not fall under inter-state commerce. It is virtually impossible to ensure the potential tender would not one way or another end up crossing state lines.
Brian also hits the nail on the head. Marshall has no business taking on the Fed Reserve. He is a STATE delegate, not a US Senator or Congressman. He needs to be solving real problems for those in his district, not chasing shadows.
Andrew, Marshall claims otherwise and has a string cite to some cases.
I was always under the impression you were, but the cases seem to say something different. Granted, they’re all over a hundred years old, but I shepardized them and they are still good law.
Brian you’re party is just getting crazier and crazier. Admit it. For God’s sake at the federal they’re seriously talking about collapsing the world’s economy by defaulting on our debt to score political points.
Marshall’s true colors are coming out. As the far right gets emboldened by the likes of Chooch more of these lame brain ideas start to surface. My guess Marshall has always held these kookie ideas but never felt the political winds would support him. My guess is Chooch would support this, if it catches any momentum. Test balloon.
“I don’t know why anyone – especially a fiscal conservative – would propose any kind of plan like this that if implemented would require all kinds of new bureaucracy in Richmond.”
Publicity, perhaps?…
This squints toward secessionism.
Brian:
This is basically trying to divorce the Virginia economy from the US (and world) economy. Oh that would be an interesting situation.
I just don’t see how you haven’t lost patience with Delegate Bob. In the world of logic (and finance) he is a non-starter.
Who is the hell hired this guy. We have more important things to worry about, and he is talking about doing a survey (wasting more money) regarding coins. What a JERK. This guy is nothing but trouble. What planet is he from. AND stay out of the military issues also.
Your name maybe “Local GOP” but you certainly don’t represent it. You better wake up and smell the coffee. The Fed and this administration is purposely destroying our economy and or future by spending us into obilivion. At least someone has a viable idea to save our Commonwealth.
Let’s see, I lost 27% in my 401k and about 20% of my home value, like everyone else, both caused by the actions of our elected Fed Gov’t and you want me to continue to trust them. I don’t think so….
Concerned Patriot, you didn’t lose 27% in your 401(k) and 20% of your home value because of the government. You lost that because of a lot of folks in Wall Street and elsewhere who played fast and loose with a lot of ethical rules and engineered a collapse of the housing and stock markets.
Government was complicit, but it wasn’t their fault. If anything, the Fed kept things from getting worse.
This isn’t a viable idea, it won’t save the Commonwealth, and we can’t afford it.
Brian: What you said about Wall Street.
The federal government is however culpable for not lining some of these people up against a wall and shooting them as an oject lesson to the others.
This is the type of crime the death penalty actually could deter;-)
Brian, The Fed is in bed with Wall Street Lobbyist, where do you think they get the big money to run again if that’s not the case, as Steve V. mentioned they would have been dragging them through the courts. As far as the Housing Bubble goes it started with the Community Reinvestment Act of 1977, not enough room in this blog to cover the details you can Google it.
I could go on and on about our elected “officials” Republican and Democrat getting us into this mess. The fact is, I don’t have trust in ANY of them getting us out of it.
I’m not sure if it’s true but can you exchange foreign coins? (ie European)
If Virginia coins got out into the US economy for awhile and then everyone wanted to exchange them for paper bills, or other states (or individuals) wouldn’t accept them, (like Canadian coins) these coins would just drag down the Va economy.
Concerned Patriot,
How much did your 401k grow in value between 2000 and 2007? How much did your home value grow during the same period?
If your situation is typical, you “lost” about 20% of home value that doubled in the prior five-seven years and you “lost” 27% of a 401k portfolio that had double-digit growth in each of the prior seven years.
Of course, if you bought your house at the peak of the bubble or jumped into securities at the top of the market, then you gambled and lost.
Concerned Patriot, how can you possibly be taken seriously when he begin your comments by saying “The Fed and this administration is purposely destroying our economy and or future by spending us into obilivion”?
It’s ridiculous to think this is happening. It’s appropriate to question and debate strategy and tactics, but there is no way there is a destructive conspiracy going on. That’s down right ludicrous.
Brian, congrats, the following NBC4 article links to your blog.
http://www.nbcwashington.com/news/local-beat/The-Marshall-Planthe-VA-Mint-113007264.html
BTW, the comments on the NBC4 site seem to all think Marshall is crazy.
My understanding of this is..We purchased our homes and watched them climb in value for 3 – 4 years then watched it drop in a year or two (still dropping). I am not naive enough to believe the markets don’t rise and fall naturally however you cannot convince me that the Fed starting with the CRA and continuing with other “Bright ideas” allowed/dictated to the banks to give loans to individuals who clearly could not afford them, caused foreclosures and the situation we are in now.
As far as the 401k (equities market) goes, again thanks to the Fed abolishing the Glass Steagall Act which kept investments in equities (high risk) separate from mortgages and small business loans through local smaller banks separate allowed the large investment banks to buy them up and mix high risk investment in equities with more stable and regulated (used to be anyway) mortgages (into derivatives) helped bring down the housing market with a “correction” (drop) in the equities market. Now the derivatives have been sold worldwide and are so convoluted the no one knows how to unravel them. We will be bit by them again. Where are the investigations?
CP, come on – the Fed can’t abolish anything. Congress did that.
The investigations already happened – all of that is what the Democrats said to justify their financial services reform law that passed last year.
Again, the currency issue here has nothing to do with that.
BlackOut….that is Exactly what I’m saying. NO ONE would be making the type of decisions these people are making by accident. This is purposeful. 60% of the country did not want the Health Care Bill and they passed it anyway…..
BlackOut, I noticed NBC’s blog comments on this also but you have to consider the source, ie progressive, Marxist, Liberal, Socialist….Democrat, need I say more?
Brian, My point is, as a country, our economy is VERY questionable, our financial future is bleak, we are in debt to one of our arch enemy’s, our allies (Europe) if you could call them allies are in as bad a shape as we are. Our Social Security has been spent, we don’t have the money for Medicare or Medicaid that they have been collecting for roughly 70 years, they spent it on Baseball Hall of Fame Museums and other pet projects.
I don’t trust our Fiat money which is manipulated by the Federal Reserve which is not a Government Agency but a conglomerate of big banks.
I’m open to a more stable precious metals based money like we had once, oh, that’s right the Federal Gov’t took care of that too.
And people wonder why the Tea Party came about.
And people wonder why the Tea Party is now not so popular. Lots of hidden agendas in that little get together. I predict we won’t be talking about the Tea Party in four years. That’s not saying the issues brought forth by the TP won’t still be around. I don’t see the TP as having any longevity.
BlackOut, maybe your right but is shows the current amount of disgust in where we are headed and the lack of trust of the Republican party to address the issues ie. national debt.
Who the hell is this cat, William Jennigs Bryant? What’s next, and amendment to the Virgina Constitution allowing for bi-metalism and the free coinage of silver?
Marshall is the king of wasted time. Again and again, he champions issues that have 0 chance of becoming law.
Yea, and our founders were thought of as crazies by some in their time.
People with novel ideas on governing is how this, as Thomas Jefferson refered to it “Great American Experiment” came to being.
We need more Ken Cuccinelli’s, Bob McDonnell’s and Eric Cantor’s in the GOP. These Republicans are on the attack, not waiting for someone else to act first. Those RINO’s that sit on the sideline and wait for others to write the bill, submit the lawsuit need to be replaced.
Concerned Patriot [sic]:
You gambled and you lost. You could have invested in CDs and bonds (of all types). You didn’t. If you had you’d now have considerably more than you would have started out with. You didn’t understand the risk(s); you still don’t. Your implicit threats are frightening, but fortunately you have little to no power in the market or otherwise. I’ve completely recovered. If you were financially competent, you would have also by now.
All I can say is that is sad how many intelligent people disassociate the creation of asset bubbles from monetary policy. The Fed is a necessary player. The Fed’s continously accomodative monetary policy played an essential role in the creation of the asset bubbles that burst so dramatically in 2008. Accomodative monetary policy along with the massive conflicts of interest created in the wake of the repeal of Glass Steagal, and government engineered interventions in the mortgage markets engineered through Freddie and Fannie were the primary reasons that we came within a hair’s breadth of bringing down our entire financial system.
The Fed is blowing new bubbles as we speak with long-run implications that will be at least as bad as what happened in 2008 and perhaps much worse.
Continued Republican support of market manipulation by the Fed as opposed to support of stable, predictable management of the money supply, like that espoused by Milton Friedman, is one of the reasons the party needs to be reinvigorated (i.e., all the Bushies are suspect). The Republican party lost its way; it needs to get its bearings back.
As for anyone who might want to say that I don’t know what I’m talking about, well, I didn’t lose money at all in the debacle. Made decent money in 2004, 2005 and 2006, a few bucks in 2007, earned big bucks in 2008, 2009 and 2010 (compound annual rate of about 20 percent) because I saw what was happening, understood what was coming and acted accordingly.
I would rather make money from sound investments that are performing well in an environment of value creation and dynamic econonic growth that can only occur with free and competitive markets. But so long as folks insist that the government can manage, impose policy and control this or that part of the economic and financial system I will have to content myself with making money off the game, off of volatility and from the gargantuation failures the interventionist game produces.
Concerned Patriot,
I stopped reading when you called local NBC 4 marxist.
Those who put their toral faith in fiat have a very short memory span pf human history.
No one plans for out of control monetary policy, or hyperinflation, but it is best to guard against it. How can you complain of $12,000 to study the idea where, if it did come to pass within 20 years, it actually reserved some sameness and order to Virginias financial system in the event of a collapse?
We compete with currencies across the world all the time. Why is it crazy to have a state currency? Really, why?
Those who put their total faith in fiat have a very short memory span pf human history.
No one plans for out of control monetary policy, or hyperinflation, but it is best to guard against it. How can you complain of $12,000 to study the idea where, if it did come to pass within 20 years, it actually reserved some sameness and order to Virginias financial system in the event of a collapse?
We compete with currencies across the world all the time. Why is it crazy to have a state currency? Really, why?
Centipede and Let be Free, I’m truly am happy you avoided the mistake I made, I clearly am not as financially astute are you are, I admit it. I trusted (and paid well) a “Financial Advisor/Planner” to advise me on my retirement account but didn’t realize until it was too late that he is an Insurance Agent who took a one week course in Financial Planning and then opened shop. He brought a lot of other people down financially, I consider myself lucky to bail out when I did. Unfortunately there are many like him out there. I now see him as a guest on a major TV network financial show once in a while giving advice…. amazing. I’m optimistic I will eventually recover, still have time before retirement, bruised but not beaten.
I did not intend for this to turn into a blog about my issues. Let’s get back to the topic of Marshall and the Virginia Currency idea.
CP and Peter: All money is “fiat” money.
So unless you want to go back to a barter economy that’s your only choice.
CP:
I apologize for my harshness. Suffice it to say I am not a “tea party” person. You’ve had a lot of pain. You are correct that this shouldn’t be a blog about your issues. HOWEVER, in the future you should use morningstar.com as your source of financial intell. They are unbiased and are mostly free. The small cost of membership is well worth it.
On the original post, any currency that bears some reasonable and predictable relationship to economic value and isn’t manipulated for short-term political advantage is a good currency.
I say, therefore, that whatever the specifics of Marshall’s proposal, he’s right for bringing up the idea because the issues that underly his proposal are real and profound. He should be encouraged. We shouldn’t have a financial system and monetary policy where it takes someone like myself who has decades of experience in law, finance and economics to understand what the heck is going on and how to wend one’s way throught the ups and downs.
I would recommend that anyone who insists on criticizing Marshall read a lot more Monetary History of the United States and pay a bit less attention to Hadly v Baxendale. As we write the Fed is monetizing debt in a coordinated effort with the administration to “boost” the economy — a process that devalues the currency in order to transfer resources from the private sector to the public sector, depending ultimately on public sector spending to keep the economy afloat. That tranfer of buying power is showing up in our pocket books right here, right now when we fill up our gas tank, pay a utility bill or go to the grocery store. We pay more so the government can incur more debt and, if the government ever pays back some of that debt, it will repay with dollars that are worth substantially less than the dollars it initially borrowed.
As for certified financial advisors there is hardly a one of them who would know IS/LM curves if they hit him or her in the face (the important point being there is a supply and demand for the currency just as there is for all other goods and services). Simply put, since the supply of money can be infinitely expanded costlessly by the Fed, in Jim Cramer’s words don’t bet against the Fed, unless of course the Fed has underestimated the severity of an encroaching financial crisis (as it did throughout 2007) or has insufficient tools to address the crisis (as it did until late in 2008 until TARP was passed) or is “printing” so much money that the currency loses credibility in the markets (which we are lurching towards as I write, but it’s not too late to stop, yet).
Peter, it’s not crazy. It’s just a complete waste of time and money. And yes, spending $12,000 to study something that will never happen is a waste of money.
Got a question for anyone who really understands the Constitution–
“Section. 10.
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”
This sounds like a state can’t coin its own money or am I reading it wrong?
PW Rez: I think you’re reading it right. Marshall has some sort of elaborate work around where the coins wouldn’t really be “money.” Sort of like what you get from Franklin Mint.
Steve, thanks–so it will be like “Disney Dollars” I guess.
Lets Be Free,
Jim Cramer is not a financial adviser, he is an entertainer. Anyone who acts on his opinions is bound to loss money. He has been thoroughly debunked by outlets ranging from the Wall Street Journal to Jon Stewart.
Sorry, “lose” money.
Hisroc: Yes, Cramer is entertaining. He is a source of a lot of good ideas and valid insights. Although I do a lot better by listening to “myself” than listening to Cramer I’ve learned much about how Wall Street operates from listening to the guy.
Cramer was one of the few stock pickers to tell people to bail out of equities altogther well before the markets hit bottom and shamelessly promoted equities again when fear was keeping most people out of the markets. Paying attention to the tenor and timing of his recommendations would do most investors some good. He’s not perfect timing markets but, then again, nobody is.
LBF,
You could not be more wrong about Cramer.
Example, in early October 2008 after the S&P 500 dropped below 900, he dramatically advised “anyone who needs money from their investment portfolio in the next five years to sell all securities (equities) immediately.”
Just as an aside, anyone who needs money from their investment portfolio in the next five years, for a child’s college education, for a wedding, or whatever, has absolutely no business having that money in securities. Securities are for long term investment strategies, not short term trading.
Less than six months after Cramer made that pronouncement, the S&P bottomed out at 683. Twelve months after his doom and gloom assessment, it was back up to 1100. Today it closed just below 1300. The people who took Cramer’s advice in Oct 2008 sold at or close to the bottom of the market. To buy back their securities one year later would have cost them 35-60% more than what they sold them for. The people who stayed invested in securities in October 2008 realized an average 22% increase in portfolio value in the following 12 months and a 45% increase in value from then to today, less than two and a half years later. So much for Cramer’s five-year forecast.
Cramer thinks that individual investors can “time” the market. He is full of shit. He is fond of pointing out how much money you could have made if you had bought at the bottom of the last trough or sold at the top of the last peak. The problem is that when people try to do that they wind up selling near the bottom and then buying near the top. Hindsight, courtesy of Jim Cramer is 20-20. Timing the market requires a crystal ball.
Securities investment is only for those who have a long term investment strategy. When your need for investment capital becomes short term, you need to be in CDs, bonds, or other fixed-rate vehicles that guarantee your principal.
By all means, take this clown’s investment advice. Have a happy retirement living on Social Security.
Wrong about Cramer? And here I thought the market hit bottom in March of 2009, getting out 5 months early is a damn good deal for most.
Geez HisRoc, I listened to Cramer, picked up a lot of useful information and insights and will have a happy retirement likely with no dimunition in income from my days of employment. To oversimplify a bit, I sold my long positions in 2007, bought short in 2008 and went back into equities big time in April and May of 2009 and have pretty much stayed in equities since.
I certainly agree that it is foolish to listen to one person and do whatver that person tells you to do, whether that be with investments or any other aspect of one’s life. I would never advise someone to buy or sell just because Cramer says so. I would encourage folks learning how to invest on their own to listen to Cramer, and chew on the food he offers for thought. And, of course, to listen and learn from others as well.
It didn’t take a crystal ball to realize that US savings rates had dropped to zero percent in 2007 and that real estate asset prices had risen in relation to income growth something like twice the historical norm. It was crystal clear with that kind of extraordinary leveraging that any signficant disruption would lead to massive forced asset sales and plunging asset prices, though nobody could predict the exact timing and rate. Disruption was supplied in the form of unaffordable subprime mortgages and ARM’s that pushed borrowers into default. It was going to be bad, very bad. The first signs of disruption appeared in the Spring; by August the Fed started to catch on to what at that point was an inevitability.
Fast forwarding to Spring of 2009 when it was clear that the banking system had stabilized, the Fed was using every weapon in its arsenal to infuse liquidity into the system and backstop credit markets. Many S&P 500 stocks had plunged to ranges implying they would never return to even half the profitability they once enjoyed. Yes, there was still reason to fear, but the reality was fear not, because as Cramer says “Don’t fight the Fed.”
Toward a New Global Economy
The Global Economy Series
by Timothy Williamson
30 Dec 2010
For the EU or any regional grouping of states, or for the entire globe, there should be a stronger federal style grouping of those states, a strong central bank and a strong single currency. If you are serious about the union you are trying to form, then for there to be long-term growth and success as a union then you must strengthen the authority and reach of the union.
“There is a synergistic amplification of economic power and influence when individuals, groups of individuals, states or groups of states join together to form a single currency under the management of a strong central bank.” Timothy Williamson, 24 Dec 2010, Friday, 23:30 local time (0530 GMT)
This is the basis for the economic success of the US since the idea was first presented to the US Congress by Alexander Hamilton in 1790. At that time, the states used their own currency, operated state banks and controlled their own fiscal and monetary policies as separate and distinct sovereign states within a weak federal system. The state economies and the overall economy of the new nation were in dire straits after the Revolutionary War, with the federal government owing what would be equivalent to $1.4 trillion dollars in today’s money. The resulting national economic chaos could only be repaired when the states acknowledged that they could not independently solve their economic challenges. The nation was very near the point of actual and real collapse because of the economy. In other words, the economies of all the states had become irreversibly interdependent and connected. People, businesses and jobs could easily move from state to state within the nation. The cities were becoming centers for textile and manufacturing plants, and the rural areas provided the food, tobacco and whiskey. Businesses would move from one place to another depending upon resource and labor costs and availability. Hamilton knew that the only real viable solution to stabilize then grow the state economies out of pending demise was for the federal government to take on the states debt through the issuance of bonds to be held by those states and individuals so the they thereby had cause to support the success of the nation. Hamilton’s plan created the first national central bank of the US, and established a single currency for the nation. When his plan was implemented in 1791 the economy, the creditworthiness and fiscal stability of the US almost immediately improved.
By operating under a stronger federal system with a single central federal bank in control of monetary policy and a single national currency, the overall economy of all the states improved dramatically above what they could have done on their own – if they could have survived the economic meltdown in the first place. Of course, every time the political winds shifted in opposition to the central bank, shutting the bank down, the economy collapsed. Every time the federal central bank was re-chartered, first in 1791 for twenty years, then after the War of 1812 in 1816 for twenty more years (Pres. Jackson defunded the central bank in 1832, a real estate bubble had also occurred, and the economy suffered for years afterward), then Lincoln had to fund the Civil War debt by creating the First National Banking system in 1863, and by 1913, after many turbulent years of the Long Depression starting in 1873, problems in 1899, the Federal Reserve was created to further stabilize the national economy, the economy grew. The people prospered. Businesses expanded, and innovation and creativity reigned.
There is obvious and historical proof that when states join together in recognition of the mutual and inescapable connection each has with the other, then there is an amplification of economic strength and influence. The same will be true on a global scale. We do not need to run from this fact, but rather we should embrace the coming change. We can either be part of the global solution and help create an effective single global currency, where no nation has its own currency, and we have a strong global central bank or we will get what happens to us as we continue to decline in the long term. As has been proven in US history, such a union will make each member stronger than we could be independently.
Timothy Williamson
globaleconomy101@gmail.com
You create financial alternatives because the current model is not working properly. If your current monetary model is headed for a cliff, you turn. If that change costs you a dollar more, you still make the change and avoid the cliff. You pay it because the alternative is you fall off the cliff. The Federal Government prints and spends their money, the are not going to give that up. Change occurs at the state level because it can.
It is VERY smart to be looking ahead. In 5 years the U.S. Dollar will no longer be the world’s global reserve currency and then what? A nation saddled with $15-20 Trillion dollars in debt and a languishing economy? Marshal is a very smart guy and you should listen to him.
By the way, the “Federal” Reserve is about as “Federal” as Federal Express. There are now 10 states that have proposed such currency alternatives.
Mark Herpel
editor@dgcmagazine.com
Skype “digitalcurrency”
The Mint is one of the very few parts of teh federal government that produces INCOME. You would not believe how profitable the US Mint is. Then again, maybe you would… If Virginia has the power to mint gold and silver coins, then we should exploit that as a revenue-producing enterprise for the state. Virginia can easily “outsource” the operation and sell the coins for a profit.
It is an excellent article, I’ll comment here again because it is now 7 months later. The article is accurate in how the American public looks at money (that includes VA). Of course this is now beginning to change rapidly as gold approaches $2000 an oz. and it looks like the FED could embark on QE3.
Can you remember when ATM cards were first introduced? (I can) No consumer would touch them, everyone wanted to visit the lobby or drive through- I remember my family saying “now way would I get my money from a machine”…Just because at present, it seems that the public “doesn’t like it ” is not a logical argument for the future of new products.
About two months after you wrote this article, in March 2011, the State of Utah passed HB 317. Utah now recognizes gold and silver U.S. coins as legal tender. Meaning…it’s voluntary to use them if you or your business wants to avoid inflation and other problems associated with the U.S. dollar. This law does not permit the minting of private coins, it allows only U.S. minted coins like Gold & Silver Eagles and does not require “face value” to be recognized. What Rep. Marshall proposed is, in some forms, is already being passed in other states, he was not that far off. [no minting of coins but use as legal tender]
Apr. 4th, 2003 The State of Nevada Legislative Council Bureau took a very close look at NV coining their own money and the legal team’s final recommendation was NO. Here is that 3pg ltr. citing their reasons http://www.scribd.com/doc/62642670
A reader’s comment that consumers don’t use paper money anymore, because money circulates in digital form, is very accurate. However, digital gold currency has been used around the globe for over a decade. DGC is privately held gold on deposit and privately issued digital units circulating over the Internet and mobile devices. This is truly competing currency. I have a GoldMoney.com iPhone app that let’s me pay in person with my iPhone using digital gold anywhere in the world. An extremely accurate local digital gold system could be used in VA which offered very inexpensive fees and payments as low as .01 cent. These are cheap & easy to set up and beneficial to both merchants and users. U.S. minted gold eagles or silver could be used at the stored metal. Fees are much lower than banks and credit card companies…all the while storing customers funds in metal not gold. Access to the funds is 24/7 with digital gold-no weekend hours, no holidays etc.
I leave with the following note regarding Bill Greene’s paper, “Ending the Federal Reserve from the Bottom Up: Re-Introducing Competitive Currency by State Adherence to Article I, Section 10″, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1570108
In early 2009, I was teaching a course on American Government at Gainesville State College here in Georgia. As I was going over with my students the powers prohibited of the States in Article I, Section 10 of the U.S. Constitution, we hit upon this one: “No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts”. A student in the back of the room raised his hand, and asked, “What does Georgia use for paying its debts – money owed to the State, and by the State?” “Federal Reserve Notes,” I replied. “Not gold or silver coins?” he asked. “No, not gold or silver coins. And no, Federal Reserve Notes are not backed by gold or silver coins, either.” He raised his hand again. “Which States DO use gold and silver coins for paying State debts?” “None of them,” I answered. “They all use Federal Reserve Notes, which were declared to be ‘legal tender’ by the U.S. Congress.” “When did we pass a Constitutional Amendment to change this requirement in Article I, Section 10?” He had a puzzled look on his face. My answer seemed to puzzle him even more. “We didn’t.” It was quiet in the classroom at that point. I waited. I didn’t have to wait for long. “How have the States gotten away with that?” I didn’t have an answer to that question.