Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

States are Moving to Abolish Federal Fiat Currency

  by    0   2

Dan_Kurz_CFADan Kurz is a CFA with over two decades experience working in Zurich, Switzerland as a thematic strategist for Credit Suisse CIO Office. Dan’s site, DK Analytics, offers deep and broad analysis at the macro and micro level.

 

Spearheaded by legislative efforts in Utah, Texas, and Oklahoma, a substantial number of states have undertaken efforts to reinstitute gold and silver as money (according to the hyperlink-based sources, 24 have made efforts).  Numerous states are increasingly concerned about the nation’s Fed-based fiat monetary system, which debases the dollar, enables protracted, yawning deficit spending and trade deficits, and runs up huge, unpayable debts. With Utah, Texas, and Oklahoma blazing a trail back to constitutional money, states such as Louisiana, Arizona, South Carolina, and Kansas have been inspired to once again make gold and silver legal tender with which to conduct commerce in their jurisdictions.

They are trying to bring back what the Constitution dictates for states in terms of permissible tender (money): “No State shall … make any Thing but gold and silver Coin a Tender in Payment of Debts;”  (Article 1, Section 10 of the Constitution). 

When the Constitution was signed in September 1789, today’s Washington, DC was a mosquito-infested swamp.  Once it became the young federalist republic’s new capital in July 1790, it was a backwater lacking meaningful revenues short of tariff income (there was no federal income tax until 1913).  Federalism was written in CAPITAL LETTERS.  At that time, leading citizens of the several states ran for office to represent their states in Washington, DC as a “do good sacrifice” for both their states and their young country.  They typically didn’t stand for re-election or seek multiple terms.  Action, commerce, good income generation, wealth, and their families were waiting for them when they returned home to their respective states, … which could only conduct commerce with gold and silver coins.  Call it a de facto national precious metals monetary standard.  

US state captial

They say that history repeats.  This is for good reason.  Much of Asia still considers gold and silver to be money.  China invented paper money before the first millennium came to a close.  The Chinese, and other old cultures, including the Indians (whose women, to this day, wear their wealth, gold, on their foreheads, necks, and arms as jewelry) and the Turks, have lots of historical experience as regards paper money becoming worthless.  Gold and silver have continued to move from West to East as Asians and Asian nations shield themselves from unprecedented, global fiat currency debasement.      

So, let’s see: we’ve got Asians with the collective wisdom of thousands of years of monetary history; we’ve got our brilliant Framers, who were steeped in historical knowledge as regards both Age of Enlightenment principles (very much including inalienable rights) as well as how to keep both debt and inflation at bay, which they codified in our peerless Constitution; and we’ve got states (including a handful of original states from whence the Framers came), which gave reluctant birth to the federal government and sought to “ring fence” its powers, looking to return to constitutional money. 

These factions, constituents, and principles represent possibly unrivaled aggregated knowledge as regards what constitutes the ultimate form of money (purchasing power preservation and inflation and deflation protection), physical gold and silver.    

Which ties into a recent post of ours with the title “Fruitful disruption or more cronyism, debt, and inflation? And valuations?”  Or, what happens when we move from real money and the rule of law to fiat money and fiat government.  As regards our take on precious metals in today’s world, we state this in our concluding remarks: 

“… We would be remiss if we didn’t also call out portfolio reallocation into vital, scarce real assets (which can’t be printed into existence), especially dense energy and ag assets, and into real money, physical gold, and silver, or precious metals (PM).  PM have been artificially suppressed by central banks and their member banks (Wall Street, London, Frankfurt) for a decade, if not longer, and in sync with unprecedented and sustained global financial repression. As such, and on the heels of the upcoming great “asset valuations reset,” PM liberated from paper manipulations may prove to be “cash on steroids,” bestowing substantially increased purchasing power on correctly positioned investors.  History clearly suggests that fiat currency regimes, and the assets tied to them, are quite short-lived — their longevity is less than three decades, on average.  We are nearly 46 years into a global fiat currency system anchored by a debasing dollar that officially buys only 17% as much as it did in 1971 (it’s actually a lot less, but …).”

Read the rest of Fruitful disruption or more cronyism, debt, and inflation? And valuations?

Get Peter Schiff’s latest gold market analysis ñ click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Fed Balance Sheet Creeping Upward Again

The Federal Reserve has talked a lot about fighting inflation. But what has it actually done? In practice, not a lot. It has nudged interest rates up 75 basis points. And while the Fed has ended the massive quantitative easing program that it ran during the pandemic, it pushed balance sheet reduction back from May […]

READ MORE →

Peter Schiff: The Fed Girds for Battle

It’s the Fed’s “hold my beer” moment. After more than a year in which Federal Reserve leadership appeared clueless, pollyannish, and indecisive, the Fed is conducting a full-throated messaging campaign to show that it is as serious as cancer about the inflation surge that is scaring the bejesus out of consumers, investors, and economists.

READ MORE →

The Fed Has Destroyed Our Savings

When I was about seven or eight years old, I remember my mom taking me to the bank to open a savings account. She explained that if I put some of my allowance in savings, that money would grow over time. Well, that doesn’t work anymore.

READ MORE →

What Are Strong Retail Sales Really Telling Us?

American consumers are in a sour mood, but they haven’t stopped spending money. The problem is they’re spending money they don’t have. And they’re getting less for it.

READ MORE →

Peak Inflation? Not So Fast!

The March Consumer Price Index (CPI) was 8.5% annually, the highest since December 1981. But the mainstream narrative was that inflation had probably peaked because core inflation, stripping out more volatile food and energy, “only” rose by 0.3%.  Mainstream pundits reasoned that the oil shock in the wake of Russia’s invasion of Ukraine primarily drove […]

READ MORE →

Comments are closed.

Call Now