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Gold As Legal Tender for States

Written by Gary North on April 9, 2013

In a dozen states, there are bills to make gold legal tender.

Nothing much will come of this. First, the concept of legal tender is anti-free market. A state should not declare anything as legal tender. It should limit itself to declaring the proper currency for the payment of taxes. Second, most of these bills will not become law this year. Third, most voters don’t care. People use plastic or currency.

What is significant is this: there is enough interest in gold today to call forth such bills. It indicates a major shift in the fringes of public opinion. Such bills would have been unthinkable in 2007.

There is a realization that gold coins would be a better investment than Federal Reserve credit. There is a growing awareness that the central bank has too much power.

These bills are the faintest hint of a decline in faith in the Federal Reserve. Ron Paul got the message out in 2007 and again in 2012. The FED has never faced this kind of hostility ever since it opened its doors in 1914.

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4 thoughts on “Gold As Legal Tender for States

  1. Bill Smith says:

    Hey, Ron Paul got the message out in the mid to late 1970’s when you could buy one ounce gold coins for around $240. He was right about the fate of the dollar then and he’s still right now in spades!

  2. It may be a little misguided, but it's a welcome shot across the Fed's and the Fed Gov's bow. We can work out the details later. But like you say, the real issue is public awareness. And it's growing.

  3. HowardRoark says:

    Right. I bought gold Krugerrands for around $270 in 1979 after reading Howard Ruff and sold them in 1980 for over $800. Bought a house and was completely out of debt. Today's climate does not look the same with gold in the $15-1600s, but if massive inflation sets in, it could still be good. I'm looking for a less expensive medium, possibly a balance of foreign currencies, such as the yuan. Your blue-chips tend to remain solvent if you are an investor, but I don't have the patience for that, and the economy is not stable enough for any long-term buy and hold strategy. I recently made a killing by buying American Airlines when it went down to 24 cents and it is now $4.00. I lost money using the same strategy with AIG–so you definitely have to do your homework!

  4. AD Roberts says:

    So you think that the states should not declare anything as legal tender. WHY? I believe that gold and silver were removed from use as tender a while back. So why not just say, "Okay, you can use it again." I know, the value floats on a second by second basis to make it difficult. BUT, at some point, fiat money WILL become worthless. And then we will be on a barter basis, whether ANYONE likes it or not. Those with gold and silver, IN ANY FORM, will be ahead in the game.