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Gold and Silver Coins in Arizona May Become Legal Tender

Written by Gary North on March 22, 2013

Arizona is likely to become the second state after Utah to pass a law specifying that gold and silver coins will be regarded as legal tender inside the borders of the state.

Other states have similar legislation pending, but Arizona is the most likely state to see this legislation become law.

I don’t think this is going to make any particular difference for the average citizen of Arizona or Utah. People are going to use digital money for most of their transactions. Digital money is convenient. Hardly anybody uses currency any longer, and far fewer people are going to use gold or silver coins to make transactions.

The only place where I ever see silver coins in transactions is at gun shows. People who like to deal in cash, and who also like to deal in guns, have a way of finding all kinds of ways to deal with each other in ways that do not leave records.

The important thing about this legislation, as well as the law in Utah, is that it is now becoming clear to more voters that there is something fundamentally wrong with a monetary system that is run by a committee of tenured bureaucrats in Washington. This kind of legislation would have been inconceivable 10 years ago. The legislation is important mainly as an economic indicator of a change in public opinion, at least in Western states, regarding the future of fiat money. The public does not know exactly how it will escape from fiat money, but legislators are at least doing something to provide a way of escape from fiat money, should voters within their states decide to make the switch.

The overwhelming majority of economists have contempt for the gold standard. This means of the overwhelming majority of economists have contempt for the free market in monetary affairs. They say they are advocates of the free market, but in the central economic institution, money, they believe in the Federal Reserve, which is a government-created monopoly over money. They are therefore contemptuous of any attempt by state legislatures to allow gold and silver coins as legal tender.

Theoretically, there should not be any legal tender. Theoretically, there should not be any legislation to make anything legal tender. Legal tender means that debtors are legally obligated to accept a particular form of currency in payment of debts. This is a major interference with the free market.  People should not have to accept any form of currency in a truly free market.

If I were a member of the legislature in Arizona, I would vote against this bill. It is bad enough to have Federal Reserve notes serve as legal tender. There’s no reason to legislate another form of legal tender. But at least this legislation is a preliminary attempt by legislators who have no real understanding of the free market to do something about the Federal Reserve System, which rests 100% on its monopoly status, which is supplied by the federal government.

Let’s hope this suspicion regarding the Federal Reserve will continue to grow throughout the land.

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18 thoughts on “Gold and Silver Coins in Arizona May Become Legal Tender

  1. Phillip the Bruce says:

    Then there is the other side of the 'coin.' Many areas, including here in Maryland (the "Free State") are now operating toll roads where neither cash nor credit cards are accepted – only electronic scans such as EZ-Pass. This despite FRN's being printed with "This note is legal tender for all debts, public and private." And so far, the courts are siding with the 'No Cash' crowd.

    • OldRockerguy says:

      Out of curiosity, how do people driving in from other states that have "freeways" get around in the east. Does, that mean that folks coming from out of state can't use the toll roads?

  2. Peter Propwash says:

    If all goes well I will soon be moving back to the South West. I love New Mexico but the politics are getting rotten. That leaves Texas and Arizona, any sugestions.

    • I lived in North Dakota for 4 years a few years back. The winters were at least 5 months long and the coldest I'd ever experienced, but the people were the most genuinely GOOD people I'd ever met. Neighbors knew and helped each other without expecting anything in return. The economy is one of the best in the country as well. The have a huge surplus and it came to vote to get rid of property tax but the citizans voted to keep the tax in trust for emergencies.

      • Ozarkherb says:

        State Bank of North Dakota is unique. All States should have open competition between their own Independent Bankers Co-Operatives. Out of reach of any form of anything Federal….. Not subject to any form of Federal liens, levys, or seizures. Owners proudly put their own net worth up to loose. Sound lending practices. Sound interest on deposits and loans. Attractive to Capital……Caymans……People would withdraw their capital from anything Federal & deposit it with these independent bankers. Send all of DC & Wall Street to the FEMA Camps to await re training to carry irrigation and drilling pipe for the Once Again Private Sector……….DC GO HOME…….DC GO HOME!

    • texasresident says:

      I've lived jut north of Austin for 18 years. Summers are hot and humid and winters are mild and mostly nice. Government is fake conservative. Texas is run by Austin which is full of liberal queers and fools. But the conservatives from outside of Travis county sort of keep them in line, mostly. The result is a state that is middle of the road politically. I guess it makes for a good balance at this point. Also, there is no state income tax in Texas, which is a HUGE advantage. Property taxes are a bit higher though so if you live big you will pay more unless you can wrangle an agricultural exemption in which case your property taxes are very low. In general it's a pretty good place to be but not as good as its image appears to be to nonresidents. Local police forces are slowly militarizing and they are getting to be sticklers for anything that can be a revenue opportunity for them. There are waaaaay too many police and fire fighters on the public dole. It's almost like a welfare system for high school drop outs. Go to the scene of any minor traffic accident and you will easily have 7-10 patrol cars on the scene, 2 full firetrucks and 2 or more paramedic vehicles with everyone cashing in on big overtime. No wonder the property taxes are so high. Get rid of these freeloaders and my rating would go up a couple notches.

  3. bmac6446 says:

    I like Euro-Pacific Bank's (Peter Schiff) Gold Debit Cards. Gold and silver deposits can be spent in the market on gold/silver debit cards where transactions are charged against your precious metal deposits in real time based on the market's current price for the metals. Now that's convenient. Too bad the US government doesn't allow for such transactions.

  4. Something Fundmentally wrong with the montetary system! Of course! Our out of control spending clowns in Congress and not having a President to govern !

  5. the problem with using gold/silver as currency is that other countries can get ahold of it and melt it down putting it into their own countries monetary system draining the u.s. of our wealth. people making jewelry can also profit from selling jewelry at a higher price then the face value of the coin. also draining the resource from our reserves.

  6. Frank Nelson says:

    these laws are fundementally uncomstitional and will be found as such since the right to regulate the money supply is an expressed power of congress

    • F.N. ignorant says:

      The problem with America is that everyone with a pulse has an opinion even if they have zero idea of what they are talking about.

      “No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts;“

      That does not say "federal government MUST use gold and silver for money" but it certainly kills dead your ignorant statement that gold and silver coins are unconstitutional.

    • Ualawdude says:

      Article I, section 10 specifically says that states can make gold and silver a legal tender.

      "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."

      Whether or not it is a good idea is another matter.

  7. Other states are quietly rolling out toll "lanes" on the same highways that road-use taxes have already paid for, and which you continue to pay hefty surcharges at the pump on every gallon you buy. Soon the scales are going to tip over to more taxes extorted than productive work with which to pay taxes and then the economy will stall, like an overworked car.

  8. the truth says:

    According to the federal reserve there is NO LAW requiring ANYONE to accept federal reserve notes. Check it out for yourself.

    • You are incorrect. They are called Legal Tender Laws; it says it on the fiat money that we are required to use. Check it out for yourself.

      • ualawdude says:

        The legal tender laws obligate someone to accept payment in FRN for existing debts, but not for obligations not yet incurred. So if I want to sell something, and refuse to accept anything but silver in payment, that is perfectly legal and withing my rights. But if you already owe me a debt, I am legally obligated to accept FRN's, or the debt is cancelled.

  9. El Kabong says:

    The use of gold and silver coins as legal tender should happen here in Michigan as well. It would be a good way to battle inflation.

  10. This writter better re-read Art I, Sec. 10 of US. Const. and the intent. I agree ElKabong. My consern is that States making gold/silver coin legal a set price, I believe, must (should) be set for an ounce of either, so what happens to the open market price of each?? We do need a sound value currency backed by gold/silver/copper coins.

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