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.